The most recent Mortgage Bankers Association Weekly Applications Survey indicated mortgage demand for purchases is now 20 percent above the same time period last year. Increased demand for mortgage applications signals that many Americans are serious about buying a home for sale or condominium for sale and have started the mortgage process.
However, despite the improvement as compared to last year, the survey also revealed that overall demand for mortgages has decreased when compared to the pervious week. Demand for refinancing decreased by 8 percent and demand for purchases was down by 6 percent. The drop in activity follows a recent boost and is present during a week when the average rates for mortgages dropped.
Per the report, the average interest rate for a 30-year fixed-rate mortgage with both conforming and jumbo loans dropped from the previous week as well as 15-year fixed-rate loans and those backed by the Federal Housing Administration. The Mortgage Bankers Association’s (MBA) chief economist Michael Fratantoni indicated to CNBC that the weekly average rate isn’t revealing the big picture.
Mr. Fratantoni said, “The prior week included days with much lower rates due to volatility around the Fed's announcement that drove refinance volume up.” He added, “Last week, a more stable rate produced less volume, as rates at this level just do not provide an incentive for most homeowners to refinance.”
The weekly survey has been conducted since 1990 and surveys 75 percent of all mortgage applications for residential purchases. Read more about this story here..