Steady Rates Fuel Home Purchase Demand

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According to the Mortgage Bankers Association’s Weekly Applications Survey, average rates for 30-year fixed-rate mortgages with conforming loan balances remained unchanged last week – though rates were up for mortgages backed by the Federal Housing Administration and 15-year fixed-rate loans. Still, despite those increases, demand for loans to buy homes jumped 6 percent from one week earlier. Overall, mortgage application demand was up 2.7 percent from the previous week, as a drop in refinance activity pulled total demand downward. Joel Kan, an MBA economist, told CNBC refinance activity has slowed as the market has become more purchase focused. “The refinance share of all applications dropped to 41.8 percent, its lowest share since May 2017 as we move further into a purchase-dominated market,” Kan said. Generally, refinance activity is more sensitive to rate fluctuations. So as rates have moved up, refinance demand has declined. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

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