Mortgage Applications Remain Relatively Flat
One of the stats we like to keep an eye on at FREEandCLEAR is 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. We reported a couple of weeks ago that the application index declined slightly and the most recent report shows that mortgage application activity remains relatively flat.
For the week ended August 29th, 2014, the purchase application index declined 2.0% as compared to the prior week and declined 12.0% on a year-over-year basis. The refinance application index increased 1.0% as compared to the prior week. The composite index, which includes both purchase and refinance mortgage applications, remained almost unchanged, increasing 0.2% as compared to the prior week. The decrease in the purchase application index reflects the continued moderate decline in the home purchase mortgage activity as qualified buyers remain somewhat constrained by limited affordable inventory. Additionally, seasonal factors such as the pre-Labor Day weekend slowdown also put downward pressure on the purchase application index. The refinance application index was positively impacted by the slight decline in average interest rates, which reached their lowest levels since June 2013. (Source: Bloomberg)
What it Means for Borrowers
The good new for borrowers is that interest rates remain relatively low which means it could be a good time to buy a home or refinance your mortgage if you have not already done it. Relatively flat application activity also suggests that mortgage lenders should be hungry for more business which is favorable to buyers. With the slight decline in interest rates, existing home owners may want to check out the FREEandCLEAR Refinance Calculator to evaluate if it makes sense to refinance while prospective home buyers can use the FREEandCLEAR Mortgage Qualification Calculator to determine what size mortgage they can afford based on current interest rates.
The FREEandCLEAR Mortgage Expert
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