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MBA: Mortgage Activity Plunges to Lowest Since February

MBA: Mortgage Activity Plunges to Lowest Since February
(Marius Scarlat/Dreamstime)

By    |   Wednesday, 01 November 2017 09:36 AM

 U.S. mortgage applications slipped to their lowest since mid-February, as 30-year home borrowing costs rose to their highest in three months, the Mortgage Bankers Association said on Wednesday.

The Washington-based group’s seasonally adjusted weekly index of mortgage activity fell 2.6 percent to 389.8 in the week ended Oct. 27. This was the lowest since 371.5 in the Feb. 17 week.

Interest rates on home loans moved higher again last week, causing both homebuyers and homeowners to back away from the mortgage market, CNBC reported.

Refinance volume is 38 percent lower than the same week one year ago, when interest rates were lower, CNBC explained.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) increased last week to its highest level since July, 4.22 percent, from 4.18 percent.

"Rates increased last week as speculation over the next Fed chair continued, and the European Central Bank announced plans to taper its asset purchase program, signaling increased confidence in the euro zone economies," said Joel Kan, an MBA economist.

Meanwhile, large U.S. banks more than doubled their borrowing from the Federal Home Loan Bank System in the past decade in the aftermath of stricter regulations to avert a global credit crisis, a report from the Office of Financial Research released on Tuesday showed.

The FHLB System, which are made up of 11 regional FHLB banks, funds the mortgage market by making loans called advances to its members that include banks, credit unions and insurers. At the end of June, its advances totaled $706 billion or 65 percent of its assets, Reuters reported.

U.S. banks with more than $250 billion in assets accounted for about 30 percent of FHLB advances in June, up from 14 percent from a decade ago.

Three of the five biggest U.S. bank holding companies, JPMorgan Chase, Wells Fargo, and Citigroup, represented roughly 24 percent of the total par value of FHLB advances outstanding at mid-2017.

(Newsmax wire services Reuters contributed to this report).

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The Washington-based group’s seasonally adjusted weekly index of mortgage activity fell 2.6 percent to 389.8 in the week ended Oct. 27. This was the lowest since 371.5 in the Feb. 17 week.
mba, mortgage, activity, housing, home
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2017-36-01
Wednesday, 01 November 2017 09:36 AM
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