Mortgage Applications Creep Up
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 several weeks of declining applications in response to rising interest rates, the mortgage applications index posted a modest gain for the week ended June 19th. Refinance applications led the way, increasing 2.0% on the week as compared to a 7.0% decline for the prior week. Purchase applications increased a less robust 1.0% although that compared favorably to the 4.0% decline for the prior week. The composite applications index, which includes both purchase mortgages and refinancings, increased 1.6% after falling 5.5% for the prior week. Mortgage rates took a small breather with the average interest rate for conforming loans (mortgage amount less than $417,000) falling to 4.19% as compared to 4.22% for the prior week. (Source: Bloomberg)
What it Means for Mortgage Borrowers
Although interest rates dipped on the week, the increase in rates over the past several months has slowed down mortgage applications. The small increase in the mortgage applications index on the week should be viewed as a positive in light of the index’s mostly negative trajectory of late. As a reminder, a slowdown in mortgage activity is not always a negative for borrowers as slowing applications should make lenders hungrier for borrowers’ mortgage business. Prospective mortgage borrowers should use this time to establish relationships with three-to-four lenders so they can compare proposals and quickly select a lender when it is time to buy a home or refinance their mortgage. You can use our Mortgage Comparison Calculator to compare interest rates and fees for multiple lenders and check out the INTEREST RATES feature on FREEandCLEAR to find the lender offering the best mortgage terms in your area.
The FREEandCLEAR Mortgage Expert
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