Tags: mortgage | activity | interest | rates | mba

Mortgage Activity Hits 2-Month High as Home-Loan Rates Fall

new house and hand with mortgage calculator
(Valentin Armianu/Dreamstime)

By    |   Wednesday, 12 December 2018 11:13 AM

U.S. borrowers filed the most loan requests to buy a home and to refinance one in two months as some 30-year borrowing costs declined to their lowest levels since September, the Mortgage Bankers Association said on Wednesday.

The Washington-based group’s seasonally adjusted index on mortgage applications increased 1.6 percent to 346.0 in the week ended Dec. 7. This was the strongest reading since the week of Oct. 5 when it was 346.7.

"Mortgage rates fell across the board last week, driven by a similar slide in Treasuries. Trade fears dominated investors' concerns, and this was amplified by data released by the U.S. Commerce Department showing a widening trade deficit," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting.

"The 30-year fixed mortgage rate decreased 12 basis points over the week back below 5 percent, representing the largest single week drop since 2017."

Added Kan, "As a result of these recent rate declines, we saw another weekly increase in refinance applications, along with a rise in the average refinance loan size. Larger loans tend to react more readily for a given change in mortgage rates. Meanwhile, purchase application activity also increased over the week and was up more than three percent compared to a year ago."

The refinance share of mortgage activity increased to 41.5 percent of total applications, the highest level since March 2018, from 40.4 percent the previous week. 

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) decreased to 4.96 percent, the lowest level since September 2018, from 5.08 percent.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.41 percent, the lowest level since September 2018, from 4.50 percent.

Material from Reuters has been used in this report.

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U.S. borrowers filed the most loan requests to buy a home and to refinance one in two months as some 30-year borrowing costs declined to their lowest levels since September, the Mortgage Bankers Association said on Wednesday.
mortgage, activity, interest, rates, mba
293
2018-13-12
Wednesday, 12 December 2018 11:13 AM
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