Tags: mortgage | demand | interest | rates

Mortgage Demand Falls 1% as Interest Rates Stall

Mortgage Demand Falls 1% as Interest Rates Stall
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By    |   Wednesday, 16 September 2020 11:08 AM

Mortgage applications to purchase a home fell 1% for the week but were 6% higher than a year ago.

Overall mortgage applications decreased 2.5 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending September 11.

The Market Composite Index, a measure of mortgage loan application volume, decreased 2.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 13 percent compared with the previous week.

The Refinance Index decreased 4 percent from the previous week and was 30 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 1 percent from one week earlier. The unadjusted Purchase Index decreased 12 percent compared with the previous week and was 6 percent higher than the same week one year ago.

"Mortgage rates held steady last week, and the 30-year fixed rate - at 3.07 percent - has now stayed near the 3 percent mark for the past two months. A 5 percent decline in conventional refinances pulled the overall index lower, but activity was still 30 percent higher than last year. With the flurry of refinance activity reported over the past several months, demand may be slowing as remaining borrowers in the market potentially wait for another sizeable drop in rates," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting.

"Applications to buy a home also decreased last week, but the underlying trend remains strong. Purchase activity has outpaced year-ago levels for 17 consecutive weeks, with a stronger growth in loans with higher balances pushing MBA's average loan size to a new survey high of $370,200," Kan said.

The refinance share of mortgage activity decreased to 62.8 percent of total applications from 63.1 percent the previous week. 

The FHA share of total applications decreased to 9.7 percent from 10.2 percent the week prior. 

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) remained unchanged at 3.07 percent.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 2.61 percent from 2.62 percent.

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Mortgage applications to purchase a home fell 1% for the week but were 6% higher than a year ago.
mortgage, demand, interest, rates
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2020-08-16
Wednesday, 16 September 2020 11:08 AM
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