Total Mortgage Originations Plummeting as Rates Soar This Year

Total Mortgage Originations Plummeting as Rates Soar This Year

Throughout 2021, the United States real estate market experienced a massive resurgence, however, total mortgage originations are now plummeting this year.

Mortgage Bankers Association Forecasts Plummeting Mortgage Originations

With the release of last month’s existing home sales report, sales declined. Analysts point to rising mortgage rates as one of the primary causes, taking a large toll on application volumes this year. According to the latest data from the Mortgage Bankers Association (MBA), average 30-year fixed rates increased more than 1.75% higher than a year ago.

Purchase applications fell 6% from last year at this time. Additionally, refinancing applications plummeted a shocking 62% from one year ago. Currently, the Mortgage Bankers Association anticipates a 35% decline in total mortgage originations. This might be especially true with the massive drop in refinancings.

Total Mortgage Originations Contributing to Decline in Existing Home Sales

As mentioned, the latest data on total mortgage originations contributes heavily to the decline in existing home sales. While existing home sales posted an expected small decline from February Additionally, they also decreased 5% compared to this time in 2021. Notably, inventory levels, down 10% from a year ago, remained a major headwind.

As of the most recent reporting, housing inventory remains at just a 1.7-month supply nationally. Analysts view a 6.0 as a healthy balance between prospective home buyers and home sellers. Further disincentivizing real estate sales, the steadily rising median existing-home price jumped 15% higher than last year at this time. Currently, the median existing-home price achieved a new record of $375,300.

Housing Starts Increasing Among Multi-Family Units

Throughout the country, home buyers are in a desperate situation for new housing inventory. In March 2022, overall housing starts showed some slightly encouraging data, increasing to their highest levels since 2006. However, the boost from multi-family units met a decrease in single-family homes.

For questions on the real estate market, contact the title and escrow specialists at Plymouth Title Guaranty Corporation.

Information accredited to MBSQuoteline.

Please note: The safety of our staff and clients is our highest priority.  Effective immediately, Plymouth Title Guaranty Corp. will be taking the following precautions to limit the spread of the COVID-19 virus:

All purchase transactions need to take place at a Plymouth Title Guaranty Corp. closing office.

  • If a party to the closing is not feeling well, please contact your closer before the closing so appropriate precautions can be taken.
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Please be advised that our staffing may be impacted during this unprecedented event. While we are committed to continuing to provide outstanding service, we ask for your patience in the face of this pandemic.