Mortgage Rates Fall After Consecutive Increases
Average mortgage rates were down this past week after increasing over the previous two weeks, according to the Mortgage Bankers Association's Weekly Application's Survey. Mortgage rates for all loan categories fell, 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.
As a result of the drop in rates, there was a modest boost in both purchase and refinance activity. In fact, activity for refinancing was up 2 percent from the previous week and demand for purchase was up 1 percent.
On an unadjusted basis, demand for loans to buy homes for sale and condos for sale is now 18 percent higher than it was one year ago. Michael Fratantoni, MBA's chief economist, told CNBC that the 18 percent year-over-year gain in purchase application volume is yet another sign of growing strength in the housing market. Combined with new increases in home sales and obtaining permits to build new homes, the news is a welcome sign that residential real estate is benefiting from rebounding consumer confidence and an improved labor market. The MBA's weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgages. More here.