Mortgage Applications Rise as Interest Rates Decline
With interest rates falling, the number of mortgage applications as tracked by the Mortgage Bankers Association in the past week rose 7.3 percent on a seasonally adjusted basis compared to the prior week.
This marked the highest level of activity in two months in terms of people seeking home loans throughout the United States.
Application volume in the week ending March 2 were up about 16 percent in comparison with the same week a year ago. The number of applications for home purchase loans rose by 1 percent on a week-to-week basis, and by 2 percent compared to a year ago.
Across the nation, home purchase loan activity had been relatively flat for six weeks prior to this one, data from the MBA shows.
Meanwhile, mortgage refinance applications soared 15 percent from the week ended February 23 to the highest level seen in 12 weeks. Refinancings were up about 38 percent compared to last year.
Moreover, mortgage refinancing accounted for 46.1 percent of total applications in the last week, recovering after falling to a five-month low level of 43.2 percent the week before.
The index covers about half of the mortgage applications in the past week. Most of the bankers surveyed here typically cater to the more qualified borrowers, so bad credit mortgage applications are likely not represented highly.
In recent weeks and months, banks have tightened their lending standards, rejecting more loans. It’s possible that total mortgage approvals may be flat or falling despite the increase in applications coming in the door.
Weekly mortgage rates, as tracked by the MBA, fell sharply.
The average rate for 30-year fixed-rate mortgages dropped to 6.04 percent, the lowest rate in 11 weeks, from the prior week’s 6.16 percent. The rate for 15-year fixed-rate loans was 5.73 percent, down from 5.84 percent.
That marks the lowest point for 15-year mortgage rates in 15 weeks.
Average mortgage rates for one-year adjustable-rate loans averaged 5.79 percent, an eight-week low, down from a 17-week high of 5.92 percent the week before. ARMs accounted for 21.4 percent of applications, up slightly from 21.1 percent.
SOURCE: MarketWatch