Mortgage Applicants Not Motivated by Low Rates

first_img Mortgage interest rates continue to decline to historical lows, but this phenomenon is not motivating homebuyers to purchase a home.Freddie Mac reported last week that fixed mortgage rates declined further, which would in-turn, help homebuyer affordability amid a tight supply of for-sale homes in many markets. The 30-year fixed-rate mortgage (FRM) averaged 3.62 percent with an average 0.6 point for the week, down from last week when it averaged 3.65 percent.”Yields on the 10-year Treasury continued their downward trend this week after a small rally the previous two weeks. The 30-year mortgage responded, falling 3 basis points to 3.62 percent,” said Sean Becketti, Chief Economist, Freddie Mac. “Since the beginning of 2016, 30-year rates have fallen almost 40 basis points helping housing markets sustain their momentum into this year. Earlier this week, the National Association of Realtors announced existing home-sales were up 4 percent month-over-month in January and up 11 percent from last year.”Mortgage applications fell 4.8 percent this week, according to the Mortgage Bankers Association (MBA). On an unadjusted basis, applications fell 7 percent.  Refinance applications decreased 7 percent from last week to 58.6 percent of total applications, falling to its lowest level since January 2016.  Purchase applications declined 1 percent from one week earlier, while the unadjusted purchase applications increased 14 percent compared with the previous week and was 27 percent higher than the same week one year ago.According to the MBA, the adjustable-rate mortgage (ARM) share of activity decreased to 5.6 percent of total applications. The FHA share of total applications remained unchanged from 12.0 percent the week prior. The VA share of total applications decreased to 12.1 percent from 13.0 percent, while the USDA share of total applications remained unchanged from 0.7 percent.The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 3.83 percent from 3.85 percent, with points decreasing to 0.39 from  0.42 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans, the MBA reported. in Daily Dose, Data, Featured, News, Origination Share March 2, 2016 505 Views center_img Mortgage Applicants Not Motivated by Low Rates Freddie Mac Mortgage Applications Mortgage Bankers Association Mortgage Rates 2016-03-02 Staff Writerlast_img

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