Rate Drop Spurs Mortgage Application Demand
According to the Mortgage Bankers Association's Weekly Applications Survey – which covers more than 75 percent of all retail residential mortgages – average mortgage rates fell last week across all loan categories and are at their lowest level since last November. Rates fell significantly for 30-year fixed-rate mortgages with conforming loan balances, but were also down for loans backed by the Federal Housing Administration and 15-year fixed-rate loans. Joel Kan, an MBA economist, told CNBC rates dropped largely because of concern over international events. “Heightened geopolitical tensions last week brought mortgage rates to their lowest level since the 2016 election,” Kan said. “Refinance volume jumped as a result, and for the first time since January, the majority of application volume was for refinances, with the refinance share almost 51 percent.” Still, demand for loans to buy homes rose as well last week and is now 5 percent higher than at the same time last year. The week's results were also affected by Hurricane Harvey, which disrupted bank activity and led to double-digit declines in Texas. More here.