Purchase Mortgage Market

A A A

DEFINITION

A mortgage market for home financing transactions. The primary mortgage market is broken into two types of transactions: purchases and refinances. Both fall under the overall category of mortgage originations.



INVESTOPEDIA EXPLAINS

The purchase market is driven by broad economic factors such as employment and income growth and the rate of home price appreciation. The purchase market also has a seasonal factor as most people move during the spring and summer months. The purchase mortgage market has a sub-category of mortgages known as relocation mortgages.

While purchase mortgages and refinance mortgages are different in purpose, the level of activity in each is highly correlated to the other. For example, if home prices rise, creating equity in existing homes, some people might be motivated to "step-up" in housing by purchasing a bigger home with their newly available larger down payment, while others might extract that equity through a cash-out refinance.


RELATED TERMS
  1. Mortgage

    A debt instrument, secured by the collateral of specified real estate property, ...
  2. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute ...
  3. Mortgage Recast

    A feature in some types of mortgages where the remaining scheduled principal ...
  4. Secondary Mortgage Market

    The market where mortgage loans and servicing rights are bought and sold between ...
  5. Primary Mortgage Market

    The market where borrowers and mortgage originators come together to negotiate ...
  6. Relocation Mortgage - Relo

    A type of mortgage that is designed for relocating/transferring employees. Corporations ...
  7. Realtor Property Resource (RPR)

    A National Association of Realtors member benefit providing realtors with online ...
  8. Housing Choice Voucher Program

    The Housing Choice Voucher Program helps families with very low incomes choose ...
  9. Forbearance

    A temporary postponement of mortgage payments.
  10. Mortgage Modification

    A permanent change in a homeowner's home loan terms that makes the monthly loan ...
Related Articles
  1. Mortgages: How Much Can You Afford?
    Budgeting

    Mortgages: How Much Can You Afford?

  2. Make A Risk-Based Mortgage Decision
    Options & Futures

    Make A Risk-Based Mortgage Decision

  3. 4 Steps To Attaining A Mortgage
    Credit & Loans

    4 Steps To Attaining A Mortgage

  4. 5 Things You Shouldn't Do During A Recession
    Budgeting

    5 Things You Shouldn't Do During A Recession

  5. Forecasting Mortgage Rates: Buy, Sell ...
    Investing Basics

    Forecasting Mortgage Rates: Buy, Sell ...

  6. Leasing to Section 8 Tenants?
    Home & Auto

    Leasing to Section 8 Tenants?

  7. What counts as
    Credit & Loans

    What counts as "debts" and "income" ...

  8. How does my debt-to-income (DTI) ratio ...
    Home & Auto

    How does my debt-to-income (DTI) ratio ...

  9. Understanding The National Association ...
    Entrepreneurship

    Understanding The National Association ...

  10. Financing Options For Buyers Of Foreclosed ...
    Credit & Loans

    Financing Options For Buyers Of Foreclosed ...

comments powered by Disqus
Hot Definitions
  1. XW

    A symbol used to signify that a security is trading ex-warrant. XW is one of many alphabetic qualifiers that act as a shorthand to tell investors key information about a specific security in a stock quote. These qualifiers should not be confused with ticker symbols, some of which, like qualifiers, are just one or two letters.
  2. Quanto Swap

    A swap with varying combinations of interest rate, currency and equity swap features, where payments are based on the movement of two different countries' interest rates. This is also referred to as a differential or "diff" swap.
  3. Genuine Progress Indicator - GPI

    A metric used to measure the economic growth of a country. It is often considered as a replacement to the more well known gross domestic product (GDP) economic indicator. The GPI indicator takes everything the GDP uses into account, but also adds other figures that represent the cost of the negative effects related to economic activity (such as the cost of crime, cost of ozone depletion and cost of resource depletion, among others).
  4. Accelerated Share Repurchase - ASR

    A specific method by which corporations can repurchase outstanding shares of their stock. The accelerated share repurchase (ASR) is usually accomplished by the corporation purchasing shares of its stock from an investment bank. The investment bank borrows the shares from clients or share lenders and sells them to the company.
  5. Microeconomic Pricing Model

    A model of the way prices are set within a market for a given good. According to this model, prices are set based on the balance of supply and demand in the market. In general, profit incentives are said to resemble an "invisible hand" that guides competing participants to an equilibrium price. The demand curve in this model is determined by consumers attempting to maximize their utility, given their budget.
  6. Centralized Market

    A financial market structure that consists of having all orders routed to one central exchange with no other competing market. The quoted prices of the various securities listed on the exchange represent the only price that is available to investors seeking to buy or sell the specific asset.
Trading Center