Mortgage Rates Fall After Consecutive Increases

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According to the Mortgage Bankers Association’s Weekly Application’s Survey, average mortgage rates fell last week after rising the previous two weeks. Mortgage rates were down across all loan categories, including 30-year fixed-rate loans with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. The drop in rates led to a slight increase in both purchase and refinance activity. In fact, refinance activity gained 2 percent from the previous week and purchase demand was up 1 percent. On an unadjusted basis, demand for loans to buy homes is now 18 percent higher than it was one year ago. Michael Fratantoni, MBA’s chief economist, told CNBC that the 18 percent year-over-year gain in purchase application volume is yet another sign of growing strength in the housing market. Combined with recent increases in home sales and permits to build new homes, the news is a welcome sign that residential real estate is benefiting from rebounding consumer confidence and an improved labor market. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgages. More here.

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