Latest Rate Drops Lift Loan Demand
Mortgage applications picked up last week, as a drop in interest rates gave a boost to both refinances and home purchases, the Mortgage Bankers Association reports in its weekly mortgage market survey, reflecting the week ending Oct. 3. Total mortgage application volume rose 3.8 percent on a seasonally adjusted basis compared to the previous week.
Broken out, applications for refinancings rose 5 percent compared to the previous week, while purchase applications, viewed as a gauge for future home sales, ticked up 2 percent.
"The purchase index reached its highest level since July," says Michael Fratantoni, the MBA’s chief economist. "The increase was led by a 3.7 percent increase in government purchase volume for the week."
Nevertheless, purchase applications remain down nearly 8 percent on an annual basis.
The MBA reported that the nationwide average on the 30-year fixed-rate mortgage fell from 4.33 percent the prior week to 4.30 percent. What’s more, as the stock market weakened on Tuesday, rates continued to post more drops, even in some cases nearing their lowest level of the year of 4 percent averages, CNBC reports.
Source: “Falling Rates Offer Home Buyers a Push,” CNBC (Oct. 8, 2014)