Purchase Mortgage Market


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.

  1. Mortgage

    A debt instrument, secured by the collateral of specified real ...
  2. Primary Mortgage Market

    The market where borrowers and mortgage originators come together ...
  3. Interest Rate Risk

    The risk that an investment's value will change due to a change ...
  4. Mortgage Recast

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

    The market where mortgage loans and servicing rights are bought ...
  6. Relocation Mortgage - Relo

    A type of mortgage that is designed for relocating/transferring ...
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