Demand Falls Despite Rates Being Lower Than Ever

According to the Mortgage Bankers Association's Weekly Applications Survey, average mortgage rates fell to another all-time survey low last week. Rates were down for 30-year fixed-rate mortgages with both conforming and jumbo balances and mortgages backed by the Federal Housing Administration. But despite the drop, overall mortgage application demand fell week-over-week. In fact, it was down nearly 5 percent from the week before. Joel Kan, MBA's associate vice president of economic and industry forecasting, says, despite the decline, demand for loans to buy homes is still strong heading into fall. “Purchase applications also decreased last week, but activity was still at a strong year-over-year growth rate of 22 percent,” Kan said. “Even as pent-up demand from earlier in the year wanes, there continues to be action in the higher price tiers, with the average loan balance remaining close to an all-time survey high.” The MBA's weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

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