A decrease in refinancing activity—due to the uptick in mortgage rates since November 2016—has curtailed overall mortgage application activity in recent weeks. It’s again what was behind the 1.6 percent drop in total mortgage applications last week, says the Mortgage Bankers Association.
Applications for refinances dropped 4 percent last week and are now 33 percent below a year ago.
Meanwhile, applications for home purchases are performing much stronger, rising 1 percent last week and now 8 percent higher than a year ago. Housing analysts say that purchase activity could be much higher, if it weren’t for high prices and a tight supply of homes for-sale in many markets.
Mortgage rates haven’t fluctuated too much over the past few weeks, giving borrowers a temporary reprieve. The average 30-year fixed-rate mortgage was 4.34 percent last week, up slightly from 4.33 percent the week prior.
Source: “Mortgage Applications Fall 1.6%, But Average Loan Size Hits Record High,” CNBC (April 5, 2017)