Loan Demand Buoyed by Slight Drop in Rates
Diana Olick | February 8, 2017
A slight decrease in mortgage rates last week gave home buyers a slight jolt to get moving. Total mortgage application volume, which includes refinancings and home purchases, increased 2.3 percent on a seasonally adjusted basis last week, the Mortgage Bankers Association reported Wednesday. That said, applications continue to run 23 percent below year-ago levels, mostly due to a big drop in refinancing applications. Last week, mortgage applications for refinancings rose 2 percent on a seasonally adjusted basis, but they are 40 percent lower than a year ago, the MBA reports. Many borrowers may have already taken advantage of low mortgage rates over the past year, so the refinancing pool continues to shrink. Applications for home purchases, viewed as a gauge of homebuying activity, also rose 2 percent last week. Home purchase applications are now 3.6 percent higher than a year ago. "Mortgage rates continued to show volatility from week to week, decreasing 4 basis points to 4.35 percent last week after two weeks of increases," says Joel Kan, an MBA economist. "Since reaching a recent peak of almost 4.5 percent toward the end of December, rates have bounced around the 4.3 percent mark for the past six weeks."