At FREEandCLEAR, we continue to 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. Mortgage application activity has been flat-to-down over the past several months and the most recent MBA mortgage applications index report continues that trend.
For the week ended September 5th, 2014, the purchase application index declined 3.0% as compared to the prior week and declined 12.0% on a year-over-year basis. The refinance application index decreased 11.0% as compared to the prior week. The composite index, which includes both purchase and refinance mortgage applications, declined 7.2% as compared to the prior week. In total, mortgage application activity declined to its lowest level since December 2000. The significant decline in the mortgage applications index is partially attributable to the shortened labor day week (the index reflects only four days of activity instead of five) but the weekly decline is consistent with a gradual slowdown in mortgage and housing activity that we have observed over the past several months. (Source: Bloomberg)
What it Means for Borrowers
The decline in mortgage activity is actually good news for potential home buyers and borrowers as there should be more competition from lenders looking for mortgage business. Additionally, interest rates remain low and relatively unchanged as compared to the prior week. Shopping your mortgage business and gathering proposals from multiple lenders (who are seeking your business now more than ever) is the best way to make sure you find the mortgage that is right for you. Check out the COMPARE LENDERS feature on FREEandCLEAR to review interest rates and fees and contact lenders in your area.
The FREEandCLEAR Mortgage Expert