Lower Mortgage Rates Boost Loan Demand

Total mortgage activity—which includes applications for refinancings and home purchases—rose 2.7 percent on a seasonally adjusted basis as homeowners rushed to take advantage of lower mortgage rates.

The refinance market was what drove last week’s increase, rising 7 percent week over week as mortgage rates dropped to the lowest level since November 2016. Still, refinance activity remains about 34 percent below where it was a year ago, the Mortgage Bankers Association reported Wednesday.

The average 30-year fixed-rate mortgage was at 4.2 percent last week, decreasing from 4.22 percent the week prior, the MBA reports. Applications for home purchases dropped 1 percent for the week and are now just 0.4 percent higher than the same week a year ago. A shortage of homes for sale, amid strong buyer demand, continues to hamper sales.

Source: “Lowest Mortgage Rates Since Election Push Refinances Up 7%,” CNBC (April 26, 2017)

“Copyright National Association of REALTORS®. Reprinted with permission.”