Rate Spike Drives Mortgage Demand Down
According to the Mortgage Bankers Association's Weekly Applications Survey, average mortgage rates spiked last week from the week before. And though they remain low, rates increased 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. Naturally, the increase led to a drop in refinance activity, with week-over-week numbers showing a 17 percent decline. Purchase demand was also down, though just 4 percent from one week earlier. Mike Fratantoni, MBA's senior vice president and chief economist, says interest rates have been volatile lately. “Interest rates continue to be volatile, with Brexit votes and ongoing trade negotiations swinging rates higher or lower on any given day,” Fratantoni said. But while rates have been volatile, they remain low by historical standards. They also continue to be a motivating factor for potential home buyers. In fact, purchase demand, though down from the previous week, remains 6 percent higher than last year at the same time. The MBA's weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.