WRE News July 27, 2024
Buyer
Mortgage application activity slowed while the number of mortgages in forbearance started to rise, according to new data from the Mortgage Bankers Association (MBA).
In tracking the week ending July 19, the MBA’s Market Composite Index dropped by 2.2% on a seasonally adjusted basis from one week earlier while the unadjusted index fell by an even 2%. Both the seasonally adjusted and the unadjusted Purchase Index were down by 4% from one week earlier, and the unadjusted index was also 15% lower than the same week one year ago.
The Refinance Index saw a 0.3% uptick and was 38% higher than the same week one year ago. The refinance share of mortgage activity increased to 39.7% of total applications from 38.8% in the previous week.
The adjustable-rate mortgage share of activity remained unchanged at 5.8% of total applications.
Among the federal programs, the FHA share of total applications decreased to 13.4% from 13.5% the week prior while the VA share of total applications decreased to 14.8% from 15.2% and the USDA share of total applications remained unchanged at 0.4%.
Separately, the MBA reported the total number of loans now in forbearance increased to 0.23% as of June 30. An estimated 115,000 homeowners are currently in forbearance plans.
“The number of loans in forbearance increased in June for the first time since October of 2022,” said Marina Walsh, MBA’s vice president of industry analysis. “Furthermore, the performance of both loan workouts and overall servicing portfolios weakened, particularly for government loans.”
Added Walsh, “There were several factors that caused the forbearance rate to rise in June, including the uptick of severe weather events that hit multiple regions of the country as well as early signs of consumer distress that could potentially impact borrowers’ ability to pay their mortgages. Additionally, June’s month-end fell on a Sunday, and the weekend timing typically leads to higher mortgage defaults in any given month.”
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