Loan Activity Constrained by Prices, Inventory

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)

Mortgage Applications Fall as Rates Surge!

Mortgage applications for home purchases and refinancing continued to fall, dropping 11.5 percent last week, amid rising mortgage rates. Interest rates rose above 4 percent for the first time in a year, according to the Mortgage Bankers Association.

Applications for refinancings saw the largest declines, with applications falling 15 percent last week, the MBA reports. Meanwhile, applications for home purchases, an indicator for future home sales, fell 1.6 percent last week.

Many analysts blame the decreasing applications on rising mortgage rates. The fixed 30-year mortgage rate averaged 4.07 percent for the week ending May 31, its highest level since April 2012, the MBA reports. Fed chairman Ben Bernanke recently indicated that the Fed may soon scale back its bond purchase program, which has helped to keep mortgage rates near all-time record lows.

Source: “Mortgage applications drop as rates surge: MBA,” Reuters (June 5, 2013)