Michael Fratantoni

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Last quote by Michael Fratantoni

Mortgage rates dropped to their lowest level since November 2016, as geopolitical tensions continued to rise. Rates are still too high to attract much interest from homeowners looking to refinance, and purchase activity was relatively weak.feedback
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Apr 19 2017
We can learn a lot about a person if we know what types of things he or she talks about or comments on the most frequently. There are numerous topics with which Michael Fratantoni is associated, including Federal Reserve, December, and rate. Most recently, Michael Fratantoni has been quoted saying: “We do expect a pickup in purchase activity through the remainder of the spring season. With a strong job market and signs of continuing economic growth, we are forecasting roughly 9 percent growth in purchase origination volume for 2017 relative to 2016.” in the article Mortgage applications drop 1.8%, despite lowest interest rates since November.
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Michael Fratantoni quotes

We do expect that home sales will grow this year relative to 2016, although lack of inventory remains a constraint in many markets.feedback

I think we will need another couple of weeks of data to have a clear read on the impact of the rollback, but I expect that FHA volumes will return to their prior level for both purchase and refinance.feedback

Refi volume is still down sharply from the end of last year, remaining 13 percent below the level from four weeks ago.feedback

Mortgage application volume typically drops sharply over the holidays. However, this year, as mortgage rates continued their upward climb reaching the highest levels in more than two years, overall application volume fell even more than the holiday slowdown would suggest.feedback

The composition of application activity continued to shift away from refinance towards purchase. The refinance share of applications was around 52 percent over the last two weeks, the lowest level since July, 2015.feedback

Mortgage rates increased at least partially as a result of the Federal Reserve's rate hike and move to a slightly more hawkish stance. Borrowers may have gotten applications into their lender in advance of the FOMC announcement, as most observers anticipated an increase in the Fed's rate target at the December meeting.feedback

Purchase activity remains skewed towards the higher end, with the average purchase loan size at its second highest level in the history of the survey.feedback

Refinances are almost entirely driven by mortgage rates, while purchase activity is a function of a broader set of variables including the state of the job market, demographics, and consumer confidence.feedback

Over the last month, going back to the week prior to the election, mortgage rates on 30-year loans have increased 50 basis points, and refinance application volume has dropped by 28 percent. Over the same time period, purchase application volume is up almost 12 percent.feedback

First-time buyers and buyers of lower priced units may have stepped away from the market to some extent given the jump in rates.feedback

Mortgage lenders have been very thankful for a strong 2016 in terms of origination activity. However, mortgage application volume in the Thanksgiving week dropped sharply to the lowest level since early January, as mortgage rates increased to their highest point since July, 2015.feedback

The increase in purchase activity was driven by borrowers seeking larger loans, with applications for purchase loans above $417,000 increasing 16.8 percent for the week.feedback

This change led to the average purchase application loan amount reaching a new record of $310,000. One factor that likely contributed to this boom in jumbo purchase applications is that the jumbo rate is now 12 basis points below the conforming rate for a 30-year fixed rate loan. This is the widest spread between these rates since March 2016.feedback

Mortgage rates have continued to move higher in the postelection period, as investors worldwide are looking for increases in growth and inflation.feedback

The increase in purchase activity was driven by borrowers seeking larger loans and that drove up the average loan amount on home purchase applications to $310,000, the highest in the survey, which dates back to 1990.feedback

Globally, rates have begun to creep upwards as investors anticipate less aggressive monetary policies from central banks, and U.S. rates are being pushed upwards in response. Additionally, new data show continued positive signals regarding the job market and rising inflation, indicating that the Fed is likely to hike in December and will continue increasing rates next year.feedback

Strong household formation coupled with further job growth, rising wages, and continuing home price appreciation will drive strong growth in purchase originations in the coming years.feedback

Refinance applications dropped to the lowest level since the week of the Brexit vote, as mortgage rates reached their highest level since then.feedback

As incoming economic data reassured investors regarding U.S. growth, and financial markets returned to viewing a December Fed hike as increasingly likely, mortgage rates rose to their highest level in a month last week. Total and refinance application volume dropped to their lowest levels since June as a result.feedback

Average purchase loan size increased again, indicating that the strength is at the higher end of the market.feedback

Treasury rates fell through the course of last week, as the Fed left their target rate unchanged, and concerns grew again about global growth, particularly in Europe and Japan.feedback

Mortgage rates increased to their highest level since June last week as comments by some Fed officials made it appear that the Federal Reserve is closer to raising rates. The average refi loan size fell to its lowest level in three months as more jumbo borrowers left the market.feedback

Higher rates appeared to have a bigger impact on entry-level buyers, as the average purchase loan size increased to its highest level since June.feedback

Although the pace of job growth slowed in August, purchase volume continues to run strong at 7 percent above last year at this time. This strength is broad based, with growth at both the high and low ends of the market.feedback

The last time rates were at these levels, the refi index was almost twice as high. At these rate levels, there are borrowers who still stand to benefit, but there are many homeowners who have already taken advantage of refinancing and are not yet incentivized to do it again.feedback

As the economy reaches full employment, the pace of job growth is slowing, and this will slow the growth in purchase activity as well, but we do continue to expect growth in home sales going forward.feedback

Refinance volume continues to tail off as markets recover post Brexit.feedback

A strong job market and low rates continue to support home sales.feedback

The underwriting decisions in today's world are an automated system that's evaluating the applications.feedback

Despite the 30 year fixed mortgage rate being almost 50 basis points lower than a year ago, refinance activity has been extremely sensitive to rate increases as the pool of borrowers who can benefit from refinancing continues to diminish.feedback

Recent swings in mortgage rates have been relatively muted compared to Treasury rates, although on net both remain below their levels from just prior to the Brexit vote. Refinances fell slightly with rising rates last week, but the refinance share of 64.2 percent of applications was the highest since February of this year, as purchase volume was slow to come back following the July 4th holiday.feedback

Mortgage rates have been low for years, but the impact of Brexit has brought us close to record lows once again, with jumbo rates already at their lowest levels, giving more borrowers a larger incentive to refinance.feedback

MBA now predicts that the Fed will hike only once this year, likely in December. If the financial market disruption from Brexit persists, the likelihood of even a December hike would be reduced.feedback

Given the weak employment report for May, we think it is unlikely that the Fed will raise rates in June. However, as other economic data are pointing to continued economic growth, we do expect that they will increase rates following their July meeting.feedback

Refinance activity decreased for the second-straight week because fewer borrowers have an incentive to refi at the current level of rates, but there are still some who respond to the small changes we have seen in recent weeks.feedback

Rates dropped last week in response to concerns about further slowing in global growth, despite the fact that the U.S. job market continues to show real strength. Rates also are increasingly volatile as markets react to different signals regarding the future path for the Fed. This drop in rates is providing what will likely be only a temporary boost in re-fi activity.feedback

Mortgage rates fell below 4 percent in our survey for the first time since October 2015. The jumbo rate also decreased and was at its lowest level since April 2015. Despite the fall in rates, mortgage application activity was likely muted by the major East Coast snowstorm, although refinance activity increased very slightly.feedback

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