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.
For the week ending March 13th, the composite mortgage application index, which includes both home purchase mortgages and refinancings, declined 3.9% as compared to a 1.3% decrease for the prior week. The decrease in composite index was driven by a 5.0% decline in the refinance index which followed a 3.0% decline for the prior week. Purchase applications decreased a modest 2.0% on the week, exactly reversing the 2.0% increase for the prior week. In positive news for mortgage borrowers, interest rates dropped with the average interest rate for conforming loans (mortgage amount less than $417,000) decreasing slightly to 3.99% as compared to 4.01% for the prior week. A sluggish housing market and poor weather offset a decline in interest rates to drag down the application index. (Source: Bloomberg)
What it Means for Mortgage Borrowers
The mortgage applications index report has proven to be lackluster yet again, continuing an almost two-month trend. While a sluggish mortgage application market is negative for lenders it is actually positive for mortgage borrowers. The lack of mortgage activity means that lenders should be as aggressive as ever in generating new customers. Borrowers can use this dynamic to their advantage to potentially negotiate a lower interest rate or closing costs. Additionally, the drop in interest rates is another positive for borrowers. Whether you are refinancing or thinking about buying a home, now continues to be a great time to talk to lenders about your mortgage objectives. Use the INTEREST RATES feature on FREEandCLEAR to compare and contact lenders in your area. Gathering proposals from multiple lenders is the best way to ensure that you get a mortgage with the lowest interest rate and fees.
The FREEandCLEAR Mortgage Expert