Are Supply Woes Causing Loan Demand Drop?

The number of mortgage applications for home purchases continues to underwhelm, despite rates being at their lowest levels since November. Mortgage applications for purchasing a home dropped 3 percent last week on a seasonally adjusted basis.

The annual gain in purchase applications remains positive (4 percent higher than a year ago), but they’re narrowing as the supply of homes for sale falls and makes it tougher for buyers to find and afford a home, CNBC reports.

Meanwhile, current homeowners may be holding out for even lower rates. Refinancing application volume dropped 2 percent last week and is down 41 percent from a year ago, when mortgage rates were lower.

Source: “Weekly Mortgage Applications Drop 2.3% as Borrowers Wait for Lower Rates,” CNBC (Aug. 30, 2017)

Home Loan Demand Recedes Again

Total mortgage application volume – which encompasses applications for refinancings and home purchases – nudged down 3.4 percent week-to-week on an adjusted basis, the Mortgage Bankers Association reported Wednesday. The decrease came as interest rates edged slightly higher last week.

Mortgage application volume still remains 14 percent higher than a year ago when mortgage rates were at about the same average. MBA reported that refinance demand has seen the biggest downfall in recent weeks, dropping 6 percent last week. That demand is 15 percent higher than a year ago.

“Refinance activity decreased for the second-straight week because fewer borrowers have an incentive to refi at the current level of rates,” says Michael Fratantoni, MBA’s chief economist. “But there are still some who respond to the small changes we have seen in recent weeks.”

Mortgage applications for home purchases remained mostly flat last week. However, applications are about 13 percent higher than a year ago. The average on the 30-year rate mortgage rose to 3.87 percent from 3.85 percent, MBA reported.

Source: “Mortgage Applications Down 3.4% on Another Slight Rate Gain,” CNBC (May 4, 2016)

Loan Demand Spikes; Buyers Jump on Rates

Mortgage rates fell further last week and home buyers and home refinancers quickly rushed to take advantage. Total mortgage applications — for home purchases and refinances — rose 8.8 percent on a seasonally adjusted basis last week, the Mortgage Bankers Association reports.

“Borrowers are clearly seeing the rate drop as perhaps a last opportunity to seize on historically low rates,” CNBC reports.

Applications for home purchases, viewed as a gauge of future home sales, rose 5 percent week over week and are now 22 percent above a year ago.

Source: “Mortgage Applications Up 8.8% as Buyers Look to Lower Rates,” CNBC (Jan. 27, 2016)

Glowing Jobs Report Bolsters Home Loan Demand

The recent release of an employment report showing strong growth may be the key behind the rise in mortgage applications last week, CNBC reports. The strengthening jobs report offers a greater likelihood that the Federal Reserve will decide to raise interest rates next week, prompting home owners and buyers to rush to secure rates now.

Total mortgage applications—for refinancings and home purchases together—rose 1.2 percent on a seasonally adjusted basis for the week ending Dec. 4 compared to the previous week, the Mortgage Bankers Association reports. Broken out, refinance volume – which tends to be the most rate-sensitive – increased 4 percent week-to-week, while applications for home purchases inched up 0.04 percent. Purchase volume is 29 percent higher than the same week one year ago, a strong indication of more home sales.

“This year’s housing market is poised to be the best since 2007; however, consumers’ ability and willingness to purchase a home is likely to remain an issue in many regions going forward until we see consumer confidence in their income growth consistently gain traction,” wrote Fannie Mae chief economist Doug Duncan in a recent report.


Source: “Weekly Mortgage Applications Up 1.2%,” CNBC (Dec. 9, 2015)

Home Buyers Stay Resilient as Interest Rates Surge

Overall mortgage applications tumbled for the third consecutive week last week as rates rose to their highest level of the year. However, an indicator for future home sales is staying resilient against rising rates.

Loan demand for purchase applications, viewed as a leading indicator of home sales, rose 2.4 percent for the week ending Aug. 23, according to the Mortgage Banker Association’s weekly index, accounting for 75 percent of the residential mortgage market.

The MBA’s overall index, which includes refinancing and purchasing demand, dropped 2.5 percent last week. That follows a 4.6 percent decrease the prior week. The drop has mostly been attributed to a fall in refinancing demand. The refinance index dropped 5.4 percent last week.

The 30-year fixed-rate mortgage rose 12 basis points last week, averaging 4.80 percent — the highest average of the year, according to the MBA. Since late May, borrowing costs have climbed by more than a percentage point.

Source: “Mortgage Applications Fall as Rates Hit 2013 High: MBA,” Reuters (Aug. 28, 2013)

Home Loan Demand Picks Up Steam!

Mortgage applications rose 5 percent last week as mortgage rates declined, the Mortgage Bankers Association reported in its weekly mortgage market survey for the week ending April 12, which was released Wednesday.

Applications for refinancing’s, which make up the biggest bulk of the index, rose 5 percent, reaching its highest level since mid-January.

Meanwhile, mortgage applications for home purchases, viewed as a leading indicator of future home sales, ticked up 4 percent for the week, reaching its highest level since May 2010.

MBA reported 30-year fixed-rate mortgages, which are the most popular choice among home buyers, saw rates drop slightly last week averaging 3.67 percent, compared to 3.68 percent the prior week.

Source: “U.S. Mortgage Applications Rose 5% Last Week – MBA,” The Wall Street Journal (April 17, 2013)