Loan Demand Drops Despite Low Rates

Total mortgage activity – including refinances and home purchases – dropped 4 percent last week on a seasonally adjusted basis even though mortgage rates are near all-time lows, the Mortgage Bankers Association reported Wednesday.

“A strong job market and low rates continue to support home sales,” says Michael Fratantoni, MBA’s chief economist. MBA reports the average on the 30-year-fixed rate mortgage remains near all-time lows, decreasing last week to 3.64 percent (from 3.65 percent the previous week).

Source: “Mortgage Applications Fell 4% Even as Rates Sit Near Record Lows,” CNBC (Aug. 17, 2016)

Mortgage Rates Hit New Low for 2016

Mortgage rates this week plunged to their lowest level since February 2015, unlocking more savings for home buyers and home owners who are refinancing.

“Mortgage rates this week registered the delayed impact of last week’s sharp drop in Treasury yields, as the 30-year mortgage rate fell 12 basis points to 3.59 percent,” says Freddie Mac chief economist Sean Becketti. “This rate marks a new low for 2016. Low mortgage rates and a positive employment outlook should support a strong housing market in the second quarter of 2016.”

Freddie Mac reports the following national averages for the week ending April 7:

30-year fixed-rate mortgages: averaged 3.59 percent, with an average 0.5 point, dropping from last week’s 3.71 percent average. Last year at this time, 30-year rates averaged 3.66 percent.

15-year fixed-rate mortgages: averaged 2.88 percent, with an average 0.4 point, falling from last week’s 2.98 percent average. A year ago, 15-year rates averaged 2.93 percent.

Source: Freddie Mac