Home purchase loans rise in June. President Trump “not thrilled” with rate hikes. New home purchase activity declines year over year.

Home purchase loan closings rose in June while refinancing activity declined, reports Ellie Mae. Ellie Mae’s Origination Insight for June revealed that 71% of all loans in June represented home purchases, up from 70% in May and a new high since the report began in 2011. Refinance closings fell to 29% from 30%, as home loan rates have pushed higher since the end of 2017. Times to close all loans rose slightly to 42 days from 41 days with the breakdown being 44 days for purchases, 37 days for refinancing.

President Trump spoke to CNBC yesterday saying that he is “not thrilled” with interest rate hikes. “I’m not thrilled,” President Trump said. “Because we go up and every time you go up they want to raise rates again. I don’t really – I am not happy about it. But at the same time, I’m letting them do what they feel is best.” One thing we don’t ever want is the Fed’s independence challenged. The Fed is likely going to hike the short-term Fed Funds Rate in September but may pause after that, as the U.S. dollar continues to strengthen against global currencies.

The Mortgage Bankers Association recently reported that new home purchase applications fell year over year. Builders remained constrained due in part to a shortage of workers, and rising costs, particularly lumber costs. The MBA Builder Application Survey for June 2018 fell nearly 9% from June 2017. “Applications for new home purchases fell in June, both compared to last year at this time and relative to May, which fits the seasonal pattern. So far this year, new home applications are up 2.5% relative to the first 6 months of 2017,” said Mike Fratantoni, MBA Chief Economist and Senior Vice President of Research and Industry Technology.