Fannie Mae Forcast for 2016, Mortgage Application Volume Fell, Memorial Day

May 18, 2016

Wednesday – May 18

Government-sponsored-entity Fannie Mae reported this week that it sees lower economic growth forecasts for 2016 falling to an annual growth rate of 1.7%, down from 1.9% growth in the prior forecast and 2.2% at the start of the year. Fannie did say that the economic landscape is improving, but “it will not be sufficient enough to overcome the damage done during the first quarter of the year.” In the housing sector, Fannie Mae feels that 30-year fixed mortgage rates will be near the 3.70% range in the fourth quarter of 2016. As far as total mortgage originations, Fannie Mae expects a 3.7% decline in 2016 from 2015 to $1.65 trillion.

Despite it being the height of the spring buying season and mortgage rates at three-year lows, mortgage application volume fell in the latest week. The Mortgage Bankers Association (MBA) reports that its Market Composite Index, a measure of total mortgage loan application volume, fell 1.6% for the week ended May 13, 2016. Within the report it revealed that the refinance index increased increased 1%, while the purchase index fell 6% from the previous week. The MBA also reported that the average rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) remained at 3.82%.

With Memorial Day weekend fast approaching, drivers will take to the roads to hit the beach, favorite camping ground or local parks to enjoy a day or weekend out with family and friends. Ahead of the weekend, gas prices have moved to their highest level of 2016. The national average price for a regular gallon of gasoline rose to $2.24, above the $2.11 a month ago, though below the $2.70 recorded a year ago. The highest price recorded here in the states was $4.11, hit back in July of 2008.