Chicago, IL (PRWEB) June 14, 2014
In May, lending standards among lenders such as The Federal Savings Bank, were less strict, as the Mortgage Bankers Association announced that mortgage credit expanded.
The Mortgage Credit Availability Index went up 1.4 percent in May, increasing from a reading of 113.8 in April to 115.1. The MBA said lending standards were looser because of investors who took action to lower credit limits for mortgages offered by the U.S. Federal Housing Administration and a slight rise in the availability of jumbo loans.
On the heels of May's mortgage credit success, home loan applications went up in the week ending June 6, according to the MBA's Weekly Mortgage Applications Survey. Compared to the previous week, the Market Composite Index, which measure total application activity, went up 10.3 percent on a seasonally adjusted basis and there was a 22 percent gain on an unadjusted basis.
The Purchase Index saw seasonally adjusted growth of 9 percent and an unadjusted rise of 19 percent. It was, however, 13 percent lower than the previous year. Mortgage refinance applications went up 11 percent. Furthermore, refinance applications once again had the biggest share of total activity, increasing from 53 percent the previous week to 54 percent for the week ending June 6. Adjustable-rate mortgages accounted for 8 percent of applications. The Federal Savings bank sees the market is expanding three fold: applications, sales, and prices are all rising and it's reflective of a growing America.
Mortgage rates increased
While still lower than what was seen at the conclusion of 2013, mortgage rates went up in the week ending June 6. Compared to the previous week, the average contract interest rate for 30-year fixed-rate jumbo loans was 4.27 percent, up from 4.22 percent. For conforming loans, there was a jump from 4.26 percent to 4.34 percent. The average interest for FHA loans increased from 3.99 percent to 4.06 percent. Fifteen-year FRMs saw their average interest go up to 3.39 percent from 3.34 percent.
Freddie Mac reported similar trends in its Primary Mortgage Market Survey for the week ending June 12, with the average rates for 30- and 15-year FRMs at 4.20 percent and 3.31 percent, respectively.
"Mortgage rates continued to climb for the second week in a row following the increase in 10-year Treasury yields," said Frank Nothaft, Freddie Mac vice president and chief economist. "Also, the economy added 217,000 jobs in May, following a 282,000 surge in April and a 203,000 increase in March. Meanwhile, the unemployment rate in May held steady at 6.3 percent."
To discover which low rate mortgage options can fit your home buying needs, contact the Federal Savings Bank, a veteran owned bank.