Are Low Mortgage Rates Losing Their Pull?
Mortgage rates are hovering at the lowest averages in years, but home buyers aren’t rushing to take advantage. Mortgage applications dropped 1.6 percent last week compared to the previous week on a seasonally adjusted basis, the Mortgage Bankers Association reports.
Home purchasers posted the biggest decrease among mortgage applicants last week. Applications to purchase a home decreased 6 percent last week. Still, purchase volume is nearly 12 percent higher than a year ago.
"Purchase applications jumped up during the first full week of April and had effectively remained at that level, on an unadjusted basis, before falling this week," says Joel Kan, the MBA's associate vice president of industry surveys and forecasting. "The seasonally adjusted purchase index decreased to the lowest level since February, led by declines in applications for larger home purchase amounts” (such as declines in the jumbo loan market, loan values higher than $417,000).
Meanwhile, applications for refinancings ticked up 1 percent last week and are 24 percent higher than a year ago.
The MBA reports the average on a 30-year fixed-rate mortgage held steady at 3.82 percent last week.
Source: “Lowest Rates in a Year No Enticement: Mortgage Applications Down 1.6%,” CNBC (May 18, 2016)
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