At FREEandCLEAR, we follow the Mortgage Bankers’ Association (MBA) mortgage applications index which measures both purchase and refinance applications for mortgage lenders across the country. An increase in the MBA applications index reflects an increase in mortgage applications while a decrease in the index reflects a decline in mortgage applications.
After a three week heater, mortgage applications fell back slightly for the week ending April 10th. Home purchase mortgage applications declined 3.0% for the week after increasing 7.0% for the week ending April 3rd and 6.0% the prior week. The purchase mortgage application index had reached its highest level since July 2013 and the setback in the most recent week is small relative to the significant gains in the index for the prior three weeks. The refinance applications index decreased 2.0% following a 3.0% decline for the week ending April 3rd and a 4.0% increase the prior week. The composite mortgage application index, which includes both home purchase mortgages and refinancings, decreased a modest 2.3%, following a relatively flat 0.4% increase for the prior week. Given its robust performance over the past several weeks, the mortgage application index was bound to cool-off eventually. Mortgage rates remained low and steady as the average interest rate for conforming loans (mortgage amount less than $417,000) barely increased to 3.87% as compared to 3.86% for the prior week. (Source: Bloomberg)
What it Means for Mortgage Borrowers
A slight pullback in the mortgage application index is not a cause for concern given how strong the market has been over the past month. If anything, the dip allows lenders to get caught up on processing mortgages. The high level of market activity demonstrates that prospective home buyers are able to obtain mortgage financing and existing home owners are able to refinance their mortgages. Low interest rates continue to drive market activity and the Spring home buying season could provide additional momentum for the mortgage market. Before you apply for a mortgage review our Mortgage Expert Insights to get money and time-saving advice and then check out our Mortgage Qualification and Mortgage Refinance Calculators to determine if now is the right time to buy or refinance.
The FREEandCLEAR Mortgage Expert