Mortgage rates dropped to a three month low last week according to the Mortgage Bankers Association's Weekly Application Survey. In all mortgage categories, interest rates were down including 30-year fixed conforming and jumbo loans. Federal Housing Administrations (FHA) and 15-year fixed loans were down as well.
Worry about the Chinese economy caused interest rates to drop last week, resulting in a two basis point decline in 30-year fixed rates. This drop caused rates to drop to the lowest rate since May of this year. MBA's vice president of research and economics. Lynn Fisher said, “The pick-up in refinance activity was led by larger loan sizes on average, as continued investor interest drove jumbo interest rates down even further, by five basis points.”
There was a 7 percent spike in refinance activity from just the week before resulting in a rise of 55.5 percent share in total mortgage demand. However, demand to purchase homes for sale and condos for sale was down 3 percent from the previous week. All in all, application demand for mortgages, which is a reliable source predicting future homes sales - was up 19 percent as compared to the same week last year. Read the full story here..