The number of mortgage applications for home purchases continues to underwhelm, despite rates being at their lowest levels since November. Mortgage applications for purchasing a home dropped 3 percent last week on a seasonally adjusted basis.
The annual gain in purchase applications remains positive (4 percent higher than a year ago), but they're narrowing as the supply of homes for sale falls and makes it tougher for buyers to find and afford a home, CNBC reports.
Meanwhile, current homeowners may be holding out for even lower rates. Refinancing application volume dropped 2 percent last week and is down 41 percent from a year ago, when mortgage rates were lower.
"Mortgage rates generally fell, but not as low as they had in 2016," says Joel Kan, an economist with the Mortgage Bankers Association. "Borrowers potentially looking at a refinance might be waiting for a much bigger decrease in order to act."
The 30-year fixed-rate averaged 4.11 percent last week, down from 4.12 percent the week prior and the lowest level since November 2016, the MBA reports.
The MBA’s index of total mortgage applications, which includes home purchases and refinancings combined, eased 2.3 percent last week. The index is now nearly 25 percent lower compared to a year ago. The bulk of that drop is due to the lower number of homeowners who are refinancing their loans.
Source: “Weekly Mortgage Applications Drop 2.3% as Borrowers Wait for Lower Rates,” CNBC (Aug. 30, 2017)
