Total mortgage application activity for home buying and refinancing continued to edge down last week, dropping 2.8 percent on a seasonally adjusted basis, the Mortgage Bankers Association reported Wednesday. Mortgage volume is now 22 percent lower compared to the same week a year ago.
Mortgage rates are hovering around their lowest levels in five weeks, which means home shoppers may not be feeling the same pressure to lock in before an increase. However, the lower volume is mostly due to a decrease in refinancing as applications to refinance a home dropped 4 percent for the week. Refi activity is now 41 percent lower than the same week a year ago, when interest rates were also much lower.
Still, applications to purchase a home dropped 2 percent last week in the second consecutive week of declines. Home purchase applications are now at the lowest levels since March. But applications are 9 percent higher than the same week a year ago.
The average interest rate on a 30-year fixed-rate mortgage was unchanged at 4.17 percent last week, the MBA reports.
"It was an up-and-down time for rates last week in response to mixed economic news coupled with the Fed's [Federal Open Market Committee] statement," said Joel Kan, the MBA's associate vice president of industry surveys and forecasting. "The statement outlined a mostly healthy outlook, with a slight concern over inflation and the news that balance sheet reduction could begin 'relatively soon.'"
Source: “Mortgage Applications Slide 2.8%, Even as Interest Rates Stay Low,” CNBC (Aug. 2, 2017)
