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Mortgage Apps Cool for Second Week

Mortgage Apps Cool for Second Week

Michael Jensen, Mortgage and Finance Guru
, Mortgage and Finance Guru

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.

Purchase mortgage applications cooled off for the second week in a row as higher interest rates may be slowing mortgage activity.  For the week ended May 15th, the purchase applications index declined 4.0% after dropping a modest 0.3% for the prior week.  After increasing for much of March and April, purchase applications have hit a roadblock in May, partially due to the gradual rise in mortgage rates.   The refinance applications index inched up 0.3% on the week after declining 6.0% and 8.0% in the prior two weeks.  Helped by the gain in refinance applications, the composite applications index, which includes both purchase mortgages and refinancings, decreased 1.5% on the week after declining 3.5% for the prior week.  Interest rates reached their highest level of 2015, putting a damper on the mortgage market.  The average interest rate for conforming loans (mortgage amount less than $417,000) increased to 4.04% as compared to 3.85% three weeks ago.  (Source: Bloomberg)

What it Means for Mortgage Borrowers

With the Spring home buying season in full swing, higher interest rates have created some headwinds for the mortgage market over the past two weeks.  The positive news in the latest mortgage applications index report is that refinance applications stabilized after several weeks of significant declines.  The boost in refinance applications shows that mortgage lenders remain open for business and are looking to lend to qualified borrowers.  Although interest rates have risen over the past three weeks, they remain relatively low and prospective home buyers may be surprised to see how far their monthly mortgage payment can take them.  Prospective buyers can use our Mortgage Qualification Calculator to determine what size mortgage you can afford.  Current homeowners can use our Mortgage Refinance Calculator to determine how much money you can save by refinancing your existing mortgages.  Whether you are looking to buy a home or refinance, check out our INTEREST RATES feature to compare lenders in your area to find the mortgage with the lowest rate and fees.

The FREEandCLEAR Mortgage Expert

www.freeandclear.com

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About the author

Michael Jensen, Mortgage and Finance Guru

Michael is the co-founder of FREEandCLEAR. Michael possesses extensive knowledge about mortgages and finance and has been writing about mortgages for nearly a decade. His work has been featured in leading national and industry publications. More about Michael

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