Mortgage Applications Slip Sliding Away
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 continued to decline in February. For the week ending February 13th, the composite mortgage application index, which includes both home purchase mortgages and refinancings, decreased 13.2% which followed a 9.0% decrease for the week ended February 7th. Home purchase mortgage applications were down 7.0%, matching the decline for the prior week. Refinancing applications declined a relatively large 16.2% following a 10.0%, decline in the prior week. After a great start to 2015 that saw a tremendous boost in application activity, the mortgage market appears to have hit a wall in February . Interest rates continued to slowly creep up with the average interest rate for conforming loans (mortgage amount less than $417,000) increasing to 3.93% as compared to 3.84% for the prior week. (Source: Bloomberg)
What it Means for Mortgage Borrowers
February continues to be a cool month for the mortgage market as application activity has declined for both home purchase mortgages and refinancings. After the mad rush to refinance to start 2015, although somewhat small, the gradual increase in interest rates seems to have tempered refinancing activity. Additionally, the latest report, and particularly the decline in purchase applications, suggests that the home sales market has yet to really take off in 2015. Cooling housing and mortgage markets create opportunities for home buyers because there is less demand for available housing inventory and mortgage financing. Although the supply of homes for sale remains relatively low in certain markets now may be a good time for prospective home buyers to start the home search process. Use our Mortgage Selector Calculator to determine what size mortgage you can afford and the mortgage program that is right for you. Although interest rates have moved up, they remain relatively low. Use the INTEREST RATES feature on FREEandCLEAR to monitor interest rates and fees for lenders in your area.
The FREEandCLEAR Mortgage Expert
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