Texas storm, increasing rates freeze home mortgage market

Applications for home loans in the state fell more than 40%

National /
Feb.February 24, 2021 11:30 AM
The Texas snow storm was partly responsible for the decline in mortgage applications. (Getty)

The Texas snow storm was partly responsible for the decline in mortgage applications. (Getty)

 

The snow storm in Texas froze the nation’s mortgage market last week.

The state saw a 40 percent decline in applications for purchase and refinance mortgages last week, dragging down the national volume of requests, according to the Mortgage Bankers Association. At least 58 people died in the cold snap, which stretched as far as Ohio.

“The severe winter weather in Texas affected many households and lenders,” said Joel Kan, head of industry forecasting for MBA.

The purchase index, which tracks applications to buy homes, dropped 12 percent, seasonally adjusted, compared to the previous week, MBA’s survey found. The refinance index fell 11 percent week-over-week. The combined index dropped a total of 11.4 percent.

The decline in applications from Texans was partly responsible for the national decline in applications last week, but it wasn’t the sole factor: Mortgage rates reached their highest level since September.

The average rate for a 30-year, fixed-rate mortgage increased 10 basis points to 3.08 percent last week. Jumbo rates also increased to 3.23 percent, up 12 basis points. It was the sixth time in eight weeks that rates increased.

But Kan said the housing market remains strong despite the drop in volume and increase in rates.

“The housing market in most of the country remains strong, with activity last week 7 percent
higher than a year ago,” he said. “The average loan size of purchase applications increased to a record $418,000, in line with the accelerating home-price growth caused by very low inventory levels.”

The previous record for the highest average purchase loan size was set the week before at $412,200. The loan sizes come as national home prices are soaring. In the final months of 2020, home price indices hit historically high levels driven by unprecedented levels of inventory and strong demand.






    Related Articles

    arrow_forward_ios
    (iStock)
    South Florida resi construction starts soar in March
    South Florida resi construction starts soar in March
    Eden Multifamily heads Jay Massirman and Jay Jacobson with Cypress Equity Investments CEO Michael Sorochinsky (rendering courtesy of MSA Architects)
    Eden Multifamily, Cypress Equity score $24M construction loan for Tamarac apartments
    Eden Multifamily, Cypress Equity score $24M construction loan for Tamarac apartments
    (iStock)
    Home prices across globe hit records, prompting worries of bubble
    Home prices across globe hit records, prompting worries of bubble
    Steven and Beth Millner with One Thousand Ocean (Patrick McMullan/Getty, Google Maps)
    Private equity honcho pays $5M for Boca Raton condo
    Private equity honcho pays $5M for Boca Raton condo
    From left: Jim Cohen, Nancy Corey, Nathan Zeder, Alicia Cervera Lamadrid, Phil Gutman and Mike Pappas (iStock)
    South Florida’s pandemic-fueled residential market poised for bull run in 2021
    South Florida’s pandemic-fueled residential market poised for bull run in 2021
    Kathleen DuRoss Ford and 300 North Lake Way (Getty, Google Maps)
    Kate Ford’s Palm Beach estate sells for $55M
    Kate Ford’s Palm Beach estate sells for $55M
    Lennar Executive Chairman Stuart Miller (iStock)
    “The home used to be just shelter. Now it is the hub of our entire lives”: Lennar reports strong Q4, full-year results
    “The home used to be just shelter. Now it is the hub of our entire lives”: Lennar reports strong Q4, full-year results
    Rent-to-own startup Divvy Homes expands to South Florida
    Rent-to-own startup Divvy Homes expands to South Florida
    Rent-to-own startup Divvy Homes expands to South Florida
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...