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Mortgage Applications Plunge 10% in Post Biggest Drop Since Late 2016

Mortgage Applications Plunge 10% in Post Biggest Drop Since Late 2016

Wednesday, 25 September 2019 10:06 AM

U.S. mortgage applications recorded their steepest weekly fall since December 2016 as some home borrowing costs rose, curbing the recent pickup in loan demand for refinancing and home purchases, the Mortgage Bankers Association said on Wednesday.

The Washington-based industry group’s seasonally adjusted index on mortgage applications stood at 512.2 in the week ended Sept. 20, down 10.1% from the prior week. This was the biggest week-on-week decline since a 12.1% fall in the week of Dec. 23, 2016.

The average interest rate for 30-year fixed-rate mortgages, with conforming loan balances of $484,350 or less, edged up 1 basis point to 4.02%, the highest since the week of July 26. Two weeks earlier, it stood at 3.82%, which was the lowest since November 2016.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.46 percent from 3.42 percent.

"U.S. Treasury yields trended downward over the course of last week, as the Federal Reserve meeting highlighted the elevated uncertainty in the economic outlook. However, despite falling yields, mortgage rates ticked up again and have risen 20 basis points over the past two weeks," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "The increase in rates led to fewer refinances, and activity has now dropped 17 percent over the last two weeks."

Added Kan, "Purchase applications also decreased, likely related to the two-week jump in rates, but still remained 9 percent higher than last year. The recent data on increased existing-home sales and new residential construction points to the underlying strength in the purchase market this fall."
 

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U.S. mortgage applications recorded their steepest weekly fall since December 2016 as some home borrowing costs rose, curbing the recent pickup in loan demand for refinancing and home purchases, the Mortgage Bankers Association said on Wednesday.
mortgage, applications, home, loans, mba
260
2019-06-25
Wednesday, 25 September 2019 10:06 AM
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