It’s been said that the only certainty in trying to predict the real estate market is uncertainty, but that’s not particularly helpful to investors. At Primior, we realize that while there may be no certainties, our years of education, study and proven performance record enable us to help guide our investors to further achieve their investment goals no matter where the market currently is or where it is headed. Part of that process is to track current trends and understand them through a historical perspective.
30-year mortgage falls to a three-year low
On September 4, the 30-year, fixed interest rate conventional mortgage was 3.75%, marking the lowest it’s been since the fall of 2016. As recently as November 2018, the average 30-year rate exceeded 5%. Although many had predicted 2019 would see a steady increase in rates throughout the year, factors such as the dip in yields on the 10-year U.S. Treasury bonds and the Federal Reserve Board’s decision to drop rates were likely factors in the recent news.
August had the highest volume of mortgage loan applications in 2019
According to the Mortgage Bankers Association, not only was August the best month of 2019, purchase activity was up a healthy 9% over the same period last year. The MBA conducts surveys of mortgage bankers, commercial banks and thrifts, and the respondents account for over 75% of all residential mortgage applications.
The MBA forecasts commercial and multifamily mortgage bankers to set record
Heightened demand and higher volumes were instrumental in the MBA’s decision to bump up its previous predictions in a September 9 press release. Last year’s record loan total of $339 billion is likely to be eclipsed by as much as 6% this year.
Mortgage credit availability decreases
Despite the falling mortgage rates and the increase in mortgage applications, the mortgage credit availability index fell almost 4% in August, an indication that lending standards are tightening. Despite optimistic news otherwise, it seems some mortgage lenders are fearful of an economic slowdown.
One needs to be cautious in evaluating the myriad of data and statistics that are available to investors today. It is too easy to glean only the information that fits some preconceived notion or desire. Primior has the experience and objectivity to gather all the information, fit the pieces together and craft an approach specifically designed for your investment goals.
