Weekly mortgage applications pull back as rates edge toward 4%

Weekly mortgage applications pull back as rates edge toward 4%

Mortgage rates saw a slight rise, but apparently it was enough to dampen interest in refinances.

That resulted in overall mortgage application volume to fall 5.3%  this week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) increased to 3.99% from 3.98%, with points remaining  the same at 0.33 (including the origination fee) for loans with a 20% down payment.

MBA’s chief economist, Mike Fratantoni said the 10-Year Treasury yield increased last week amid signs of stronger homebuilding activity and solid consumer spending, leading to a rise in conventional conforming and jumbo 30-year mortgage rates to just under 4 percent.

Consequently, applications to refinance a home loan dropped 5% from the last week but were still 128% higher than a year ago, when rates were 87 basis points higher. The refinance share of mortgage activity increased to 62.6 % of total applications from 62.2% the last week.

Mortgage applications to buy a home fell 5% for the week but were 5% higher compared with the same week one year ago. Interest rates are not the primary reason for a slow down in home sales. There is a serious shortage of existing homes for sale, and that has sidelined would-be buyers, notably at the lower end of the market.

Fratantoni noted: “We are in the slowest time of the year for the purchase market. The increase in construction activity will bolster housing inventories, which should be a positive for purchase volumes going into 2020.”

The real estate section is covered by David Carty. Need any information on prices, rises and falls in the market, or genuine advice on what properties to watch out for? David has proven his mettle in the field through stellar reporting and story creation.

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