Mortgage Demand Slows With Rate Rise

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According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates increased last week across all loan categories, including 30-year fixed-rate mortgages with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate mortgages. At the same time, mortgage demand slipped slightly, falling 1.5 percent according to the Market Composite Index, which measures both refinance and purchase activity. Mike Fratantoni, MBA’s chief economist, said rising rates may be making borrowers hesitant. “Overall purchase activity fell for the week, along with conventional refinance volume, but government refinance volume increased,” Fratantoni said. “The level of purchase applications remained 11 percent higher than the same week last year, but the drop this week may indicate borrowers being wary of the recent run up in mortgage rates.” Still, the fact that the number of applications for loans to buy homes is 11 percent higher than last year indicates spring home sales will surpass last year’s pace. The MBA’s survey has been conducted weekly since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

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