So Fannie Mae has announced that they will drop their down payment requirements

While the majority of mortgage rates experienced an increase last week, rates on adjustable-rate mortgages (ARMs) saw a decline. This led to a rise in the volume of ARM applications and an overall increase in application numbers. Over the course of the week, the level of ARM applications witnessed a 15 percent growth, resulting in the ARM share reaching 9.2 percent of all applications. This marks the highest share since November 2022. According to Joel Kan, the Vice President and Deputy Chief Economist of the MBA, the yield curve has shown a reduction in inversion in recent weeks, and ARM pricing has improved as a result.

At 7.67 percent, the 30-year fixed mortgage rate has reached its highest level since 2000, representing a 40 basis point increase compared to the previous month. Nonetheless, application activity remains suppressed and is currently close to multi-decade lows. Purchase applications are trailing behind last year’s pace by nearly 20 percent. Refinance applications continue to be limited, and the average loan size has reached its lowest point since 2017.

Additional insights from the MBA’s Weekly Mortgage Application Survey reveal some notable trends. Although loan sizes have generally remained low, there was a modest increase for the first time in four weeks. The average loan size rose by $1,500, reaching $365,900. Moreover, purchase loans experienced a significant uptick, climbing from $46,200 to $421,600.

In terms of loan distribution, there were slight shifts among different programs. The FHA share of total applications decreased slightly from 14.5 percent to 14.4 percent, while the VA share showed a marginal increase from 10.1 percent to 10.2 percent. USDA loans maintained their 0.5 percent share.

Moving on to interest rates, the average contract interest rate for conforming 30-year fixed-rate mortgages (FRM) saw a slight increase, rising from 7.53 percent to 7.67 percent compared to the previous week. However, points declined from 0.80 to 0.75.

For jumbo 30-year FRM, the interest rate showed a more significant increase, from 7.51 percent to 7.70 percent. Concurrently, points decreased from 0.74 to 0.57.

Regarding thirty-year FRM backed by the FHA, the interest rate stood at 7.40 percent, accompanied by 1.08 points. In the previous week, the rate was slightly lower at 7.29 percent, with 1.01 points.

Lastly, the 15-year FRM experienced an 11-basis-point increase in interest rate, reaching 6.97 percent. Points averaged at 1.18, compared to the previous week’s 1.14.

These findings provide valuable insights into the current state of the mortgage market, highlighting the changes in loan sizes, program distribution, and interest rates across various mortgage types.

The average contract interest rate for 5/1 adjustable-rate mortgages (ARMs) experienced a decline, dropping from 6.49 percent to 6.33 percent. Additionally, points associated with these mortgages decreased from 1.21 to 0.90