Purchase Mortgage Market

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DEFINITION of 'Purchase Mortgage Market'

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.

BREAKING DOWN 'Purchase Mortgage Market'

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.

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RELATED FAQS
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    Once you reach 59.5, you can use the funds in your 401(k) retirement savings account to buy a house or any other expense ... Read Full Answer >>
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    Under the standard regulations for 401(k) retirement savings plans, you may elect to withdraw funds from your 401(k) for ... Read Full Answer >>
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    Anyone who has ever tried to purchase or sell a home has probably heard a lot about the property's fair market value, or ... Read Full Answer >>
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