Loan Demand Cools in Latest Week
A slight increase in mortgage rates prompted loan demand to drop this week. Total mortgage applications, which include applications for home purchases and refinancing, dropped 4.3 percent on a seasonally adjusted week-over-week basis for the week ending Feb. 19, the Mortgage Bankers Association reported Wednesday.
Broken out, refinance applications, which had been soaring to highs in recent weeks, dropped 8 percent over last week, while applications to purchase a home rose 2 percent from a week prior, the MBA reports. Applications for home purchases are now 27 percent higher than the same week a year ago.
The 30-year fixed-rate mortgage, meanwhile, rose to 3.85 percent last week, the first increase after six consecutive weeks of declines. The week prior, the 30-year fixed-rate mortgage had averaged 3.83 percent, the MBA reports.
"The dollar volume of refinance applications decreased by 26 percent, while refinance applications based on loan count decreased 17 percent, indicating that the volume of larger loans dropped to a greater extent than smaller loans," says Michael Fratantoni, the MBA’s chief economist. "The average loan balance declined about 10 percent across all refinance loans."
Source: “Mortgage Applications Down 4.3%; Refinances Take a Breather,” CNBC (Feb. 24, 2016)
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