Mortgage Rate Drop Spurs Demand

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According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell across all loan categories last week, including 30-year fixed-rate loans with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate mortgages. With rates down, demand for loan applications jumped. In fact, refinance activity was up 3 percent and demand for loans to buy homes climbed 7 percent from one week earlier. The unadjusted purchase index is now 32 percent higher than the same week last year. Lynn Fisher, MBA’s vice president of research and economics, told CNBC that the trend in mortgage applications is evidence that more people are buying homes. “Overall, trends in mortgage applications last week were consistent with the ongoing shift towards a purchase market accompanied by growth in employment and higher interest rates,” Fisher said. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

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