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 applications seem to be up and down on a weekly basis and this week purchase and refinance applications moved in opposite directions. Refinance applications increased 4.0% after increasing 3.0% the prior week. In contrast to refinance applications, purchase applications dropped 8.0% after increasing 7.0% the prior week. The composite applications index, which includes both purchase mortgages and refinancings, dipped 1.9% after increasing 4.6% for the prior week. After falling slightly last week, mortgage rates held steady with the average interest rate for conforming loans (mortgage amount less than $417,000) remaining at 4.23%. (Source: Bloomberg)
What it Means for Mortgage Borrowers
The dip in purchase applications is likely the results of weekly fluctuations rather than a longer trend as recent housing market indicators have been very positive. The jump in refinance applications over the past two weeks is somewhat surprising given the increase in interest rates over the past several months although borrowers could be rushing to refinance before rates potentially move higher later in the year. It is a positive sign that borrowers are able to refinance their mortgages because it shows they have sufficient equity in their properties and are able to meet lenders’ mortgage qualification standards. If you are thinking about refinancing, now may be the time to move forward to lock-in your interest rate. Use our Mortgage Refinance Calculator to determine how much money you can save by refinancing and use the INTEREST RATES function on FREEandCLEAR to keep track of refinance rates and fees for lenders in your area.
The FREEandCLEAR Mortgage Expert