Loan Demand Mostly Stalls, Despite Rates Dip
Mortgage rates have dipped to the lowest point in three years, but even that wasn’t enough temptation to lift mortgage applications by much this week.
Total mortgage applications – including for refinancings and home purchases – rose slightly by 0.4 percent week-to-week on a seasonally adjusted basis, the Mortgage Bankers Association reports. Broken out, refinancing applications increased just 0.5 percent, but are 23 percent higher than a year ago. Mortgage applications for home purchases increased 0.4 percent on a seasonally adjusted basis. Despite the modest increase, applications are still 14 percent higher than a year ago.
The 30-year fixed-rate mortgage averaged 3.82 percent last week, according to MBA. Rates dipped lower at the start of this week too, moving to the lowest level in three years, the Mortgage News Daily reports.
"Despite expectations that rates would slowly rise this year, the 30-year fixed rate last week was 18 basis points lower than a year ago, continuing to provide a favorable rate environment for the housing market," said Lynn Fisher, MBA vice president of research and economics.
However, higher home prices and tight inventories of homes for sale may be causing some would-be home buyers to pause. “[Mortgage application] volume has not improved much in the last four weeks, the height of the historically robust spring housing market,” CNBC reports.
"Even though it's a sellers' market nationally, home owners often have to make a leap of faith to list their properties because there may not be a more desirable home to move to," Redfin chief economist Nela Richardson told CNBC. "We are now starting to see sellers' anxiety play out in the data. After steady growth in new listings over the last three months, early readings suggest that fewer homes are being listed in May than we saw listed in May last year in many markets."
Source: “Mortgage Applications Up Just 0.4%, Despite Rates Near Three-Year Lows,” CNBC (May 11, 2016)
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