Mortgage Demand Rises As Rates Drop

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According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates dropped to 3-month lows last week. Rates were down across all loan categories, including 30-year fixed-rate mortgages with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. “Concerns about the Chinese economy pushed interest rates down last week, resulting in a two basis point decline in 30-year fixed interest rates, bringing the rate down to its lowest since May 2015,” Lynn Fisher, MBA’s vice president of research and economics, 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.” In fact, refinance activity jumped 7 percent from the previous week and, as a share of total mortgage demand, rose to 55.5 percent. On the other hand, purchase demand was down 3 percent from the week before. Still, purchase application demand – which is a good indicator of future home sales – was 19 percent higher than the same week one year ago. The MBA’s survey has been conducted weekly since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

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