Mortgage Rate Drop Fuels Application Demand
According to the Mortgage Bankers Association's Weekly Applications Survey, average mortgage rates fell last week 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. Rates are now down significantly from where they were last year at the same time and the improvement has caused increased demand for mortgages. In fact, refinance applications are up 144% percent over year-before levels and demand for loans to buy homes is up 7 percent. But, though that's encouraging news, there is still imbalance in the market. Joel Kan, MBA's associate vice president of economic and industry forecasting, says there are too few homes for sale and it may be holding back entry-level buyers. “Amidst persistent supply constraints in the entry-level price range, there's evidence that high-end home buyers are more active this fall,” Kan said. “The average loan size for purchase applications increased to its highest level since May.” The MBA's weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.