Mortgage rates fell for the second week in a row, according to Freddie Mac’s weekly survey…(Freddie Mac)
- 30-YR FIXED average rate fell 13 basis points to 3.76%, still up 74 basis points from the same time last year.
- 15-YR FIXED average rate fell 13 basis points to 3.01%, still up 67 basis points from the same time last year.
Sam Khater, Freddie Mac’s Chief Economist, said these rate drops are related to geopolitical events…
- “While inflationary pressures remain, the cascading impacts of the war in Ukraine have created market uncertainty. Consequently, rates are expected to stay low in the short-term but will likely increase in the coming months.”
Mortgage rates bottomed out to start 2021 and, despite a few stagnant weeks, have been on the climb ever since. This has put strong downward pressure on mortgage volume, according to ATTOM Data Solutions’ latest report…(ATTOM)
- Q-O-Q: Mortgages secured by residential property fell 11% from the third quarter to 3.27M.
- Y-O-Y: Mortgage volume was down 13% when compared to Q4 2020, this was the largest annual decrease since 2018.
NOTE: The total dollar amount was down as well to $1.06 trillion, a 9.0% decline from the third quarter and a 6.5% drop from the same time last year.
Total volume was down across the board impacting both purchase and refinance activity…
- Refinances were down 10.8% compared to Q3 and were down 22.7% when compared to the same time last year.
- Purchases were down a slightly higher 11.3% compared to Q3 but were actually positive year-over-year up 2.8%.
These numbers will undoubtedly be worse in Q1 of 2022 thanks to rising rates and record low inventory. However, if the current decline continues at the current rate it would be slightly worse than predictions we have already seen for 2022. Economists at Freddie Mac projected that “…total originations to decline from the high of $4.7 trillion in 2021 to $3.3 trillion in 2022 to $3.1 trillion in 2023.” An 11% quarterly drop equates to a 37% drop year-over-year, which is slightly worse than the 30.0% decline predicted by Freddie Mac.