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.
Mortgage application activity seems to be settling down after jumping through the roof the first half of January. For the week ending January 30, the composite mortgage application index, which includes both home purchase mortgages and refinancings, increased a modest 1.3% as compared to a 3.2% decrease for the week ended January 23rd. Boosted by continued low interest rates, refinancings increased 3.0% as compared to the 5.0% decrease last week. Despite low mortgage rates purchase applications cannot seem to pick up any sustained momentum as the purchase index declined 2.0% as compared to the 0.1% decline for the prior week. The flat-to-down performance for the application index reflects a return to normalcy for the mortgage market after the huge spike in activity to begin 2015. Interest rates continue to be attractive as the average interest rate for conforming loans (mortgage amount less than $417,000) decreased slightly to 3.79% as compared to 3.83% for the prior week. (Source: Bloomberg)
What it Means for Mortgage Borrowers
A cooling off of the mortgage market is actually a positive for borrowers as lenders were likely overwhelmed with new business to start the year. With the mortgage market calming down and interest rates remaining low, now is a good time for borrowers to contact lenders about getting a mortgage to buy a home or possibly refinancing their existing mortgages. FREEandCLEAR recommends that borrowers contact at least four lenders when shopping for a mortgage. Use the INTEREST RATES function on FREEandCLEAR to find the mortgage with the lowest interest rate and fees and check out our Mortgage Qualification Calculator to determine what size mortgage you can afford and our Mortgage Refinance Calculator to determine how much money you can save by refinancing.
The FREEandCLEAR Mortgage Expert