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Th e M Rep o RT | 29 O r i g i nat i O n s e r v i c i n g a na ly t i c s s e c O n da r y m a r k e t ORIGINATION the latest Homebuyer demand Picks Up in september Activity picks up after an August drop off. B oth home tours and signed offers rose in September, marking a turnaround after a drop in new listings held back August activity. Real estate brokerage Redfin reported a 2.2 percent monthly increase in customers requesting tours with the company's agents last month, about half the improvement recorded this time last year. "Though the September uptick in tour requests was not as strong as last year, this late season pickup suggests that housing activity will hold steady through November before the seasonal slowdown in home searches over the holiday," Redfin Chief Economist Nela Richardson said. At the same time, 6.8 percent more customers signed offers on houses than in August. While that increase was down from 12.5 percent last year, fewer of those offers faced competition from other shoppers (47.4 percent compared to 57.9 percent in September 2013). "Buyers have a much better chance of getting a home and more leverage to get a better deal," said Mia Simon, a Redfin agent in Palo Alto, California. "In the spring, we were seeing multiple offers (typically six to 10 offers) on each home, which makes it very hard to predict a final sales price, because wildcard offers tend to be thrown in. Now, there are quite a few homes that receive just one to two offers, which allows us to have a better gauge of the final sales price and also be a little softer on terms such as an appraisal contingency." With historical data suggesting a correla- tion between signed offers and home sales 30–45 days in the future, Redfin predicts an increase in sales in October and November in most markets. The latest numbers reinforce recent forecasts from the company predicting the housing market is poised to see its strongest fall season in five years. "After a rough start to the year, lower competition and continued low mortgage rates encouraged homebuyers to restart their search after Labor Day and boosted late-season demand," Richardson said. "We expect that the lift in demand will carry over to next year and position the housing market for a strong start to the 2015 home- buying season." mortgage applications down for 4th straight month Requests continue to drop even as rates remain stagnant. a n easing in mortgage interest rates to a near 15-month low did little to spur mortgage application activity throughout the month of September, market reports show. Compared to August, loan ap- plication volumes were down 1 per- cent in September, macroeconomic research firm Capital Economics reported. The company's calcula- tions are based on weekly figures released by the Mortgage Bankers Association (MBA). The decline came even as mortgage rates hovered at an average 4.32 percent for 30-year fixed-rate loans, slightly above August's average and within the 10-basis-point range interest rates have occupied since May. "While this is the lowest level for mortgage interest rates since June of 2013, there are few signs that it's stimulating mortgage de- mand," said Paul Diggle, property economist at Capital Economics. Refinancing application activ- ity—more dependent on mortgage rates than other products— dipped 2.4 percent in September, turning around after August's 2-percent gain and declining to their lowest level since August 2008. Refinance applications have fallen month-over-month in four of the year's first nine months. With rates expected to rise before the year is out, Diggle ex- pects demand for refinancing will continue to decline. Meanwhile, home purchase loan applications picked up 0.5 percent month-to-month, barely putting a dent in the declines recorded over the previous three months. The increase was sparked by a rise in conventional application activity, which was up 0.7 percent in September. That was offset by a 0.1-percent dip in applications for government loans, such as those backed by the Federal Housing Administration (FHA) or the Department of Veterans Affairs. "With FHA loans, traditionally the means by which first-time buyers with small down pay- ments took their first step onto the housing ladder, the weakness of government loan applications is one reason why first-time buyer activity is particularly weak," Diggle said. In its latest index—measur- ing the week ending September 26—MBA reported a 0.2-percent weekly decline in applications, with refinances tipping 0.3 percent and purchase loans staying flat. "While this is the lowest level for mortgage interest rates since June of 2013, there are few signs that it's stimulating mortgage demand." —Paul Diggle, Capital Economics