Applications For Mortgages, Refinancing Drop in Past Week
Loan applications to purchase and refinance U.S. homes fell last week when mortgage rates increased, an industry group said on Wednesday.
The Mortgage Bankers Association (MBA) said that its seasonally adjusted index of home mortgage applications fell for the third straight week.
The volume dropped by 3.2 percent to 649.5 in the week ending March 30.
The MBA’s seasonally adjusted purchase index declined 2.0 percent to 402.9, while its refinancing applications index fell 4.5 percent to 2,098.3.
Borrowing costs rose for all home loan products. The average 30-year fixed-rate mortgage, excluding fees, rose 0.09 percent from the prior week to 6.13 percent, their highest since 6.16 percent February 23.
The week’s slide in mortgage applications dragged all three MBA indexes down on a four-week moving average, which smooths out volatility.
On that basis, the market index finished the week 0.8 percent lower at 670.8, the purchase index dipped 0.1 percent to 409.7 and the mortgage refinancing index slipped 1.5 percent to 2,204.2.
Where is the market headed? Reports over the past few week on U.S. home sales and home prices paint a mixed picture for economists.
Long-term mortgage rates remain relatively low, which should bolster home mortgage loan applications throughout the U.S., analysts believe.
Average 30-year fixed home loan rates were close to 6.50 percent a year ago, according to the Mortgage Bankers Association.
However, stricter lending standards instituted to temper late mortgage payments and foreclosures, especially among borrowers with bad credit, likely will forestall the recovery in housing, most analysts think.
On Tuesday, the National Association of Realtors reported a 0.7 percent bump in pending sales of existing U.S. homes, suggesting stabilization.
In a pending sale, the contract has been signed but the transaction has not yet been finalized at closing. Paring down the growing stockpile of unsold homes is seen as essential for a sustained housing rebound.
SOURCE: Reuters