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WOODARD: Mortgage credit more available in July

Mortgage qualification requirements are easing, making them more available for homebuyers and owners who want to refinance their existing loans, according to several sources.

One such source recently announced that mortgage credit availability increased in July, according to the Mortgage Credit Availability Index, a report from the Mortgage Bankers Association that analyzes data from Ellie Mae’s AllRegs Market Clarity.

The MCAI increased 2.9 percent to 125.5 in July. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of a loosening of credit. The index was benchmarked to 100 in March 2012. Of the four component indices, the Conventional MCAI saw the greatest loosening (up 5.2 percent over the month).

This was followed by the Jumbo MCAI (up 4.7 percent), the Government MCAI (up 0.9 percent) and the Conforming MCAI (up 0.4 percent).

“Credit availability increased in July, mainly driven by higher-balance loan programs,” said Mike Fratantoni, MBA’s chief economist. “Many investors are fine-tuning their cash-out refinance requirements to meet increasing borrower demand for home equity financing. Some investors increased the availability of low down payment loans.”

The loosening of credit was reported by the National Association of Realtors.

Q: Are mortgage rates still super-low?

A: Yes, they fluctuate up and down, but at this writing they are still less than 4 percent.

Freddie Mac released the results of its Primary Mortgage Market Survey, showing average fixed mortgage rates moving down for the third week in a row as uncertainty about the economy pushed Treasury yields lower earlier in the week.

The 30-year fixed-rate mortgage (FRM) averaged 3.91 percent with an average 0.6 point for the week ending Aug. 6, down from last week when it averaged 3.98 percent. A year ago at this time, the 30-year FRM averaged 4.14 percent.

The 15-year FRM this week averaged 3.13 percent with an average 0.6 point, down from last week when it averaged 3.17 percent. A year ago at this time, the 15-year FRM averaged 3.27 percent.

Q: Are home sales and prices increasing?

A: Yes to both. For many buyers waiting for just the right time to take action, this might be the right point in time, according to a report from the National Association of Realtors.

The median existing single-family home price increased in 93 percent of measured markets, with 163 out of 176 metropolitan statistical areas showing gains based on closings in the second quarter compared with the second quarter of 2014. Thirteen areas (7 percent) recorded lower median prices from a year earlier.

The number of rising markets in the second quarter increased compared to the first quarter, when price gains were recorded in 85 percent of metro areas. Thirty-four metro areas in the second quarter (19 percent) experienced double-digit increases, a decline from the 51 metro areas in the first quarter.

Nineteen metro areas (11 percent) experienced double-digit increases in the second quarter of 2014.

Lawrence Yun, NAR chief economist, says the housing market has shifted into a higher gear in recent months. “Steady rent increases, the slow rise in mortgage rates and stronger local job markets fueled demand throughout most of the country this spring,” he said.

“While this led to a boost in sales paces not seen since before the downturn, overall supply failed to keep up and pushed prices higher in a majority of metro areas.”

“With home prices and rents continuing to rise and wages showing only modest growth, declining affordability remains a hurdle for renters considering homeownership – especially in higher-priced markets,” Yun said.

Q: Are mortgage applications to finance the purchase of new homes still increasing?

A: No, they are decreasing. The Mortgage Bankers Association Builder Application Survey data for July 2015 shows mortgage applications for new home purchases decreased by 4 percent relative to the previous month. This change does not include any adjustment for typical seasonal patterns.

“Mortgage applications to home builder subsidiaries for new homes declined at a rate in line with the slowdown observed in the overall purchase mortgage market,” said Lynn Fisher, MBA’s vice president of research and economics.

“This was driven in part by an increase in interest rates relative to earlier in the spring. Nonetheless the number of builder applications was still up 15 percent compared to a year ago.”

WOODARD has been writing about real estate news and trends since 1971 and is the resident storyteller at the Ronald Reagan Presidential Library in Simi Valley, Calif.

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