Mortgage Applications Drop as Rates Hit Survey Low
Mortgage activity ticked down this week, with total applications dropping 4.8%, according to the Mortgage Bankers Association. Purchase loan activity was actually up 2% for the week, but refinances dipped 7%. They’re still 52% higher than one year ago.
The average rate on 30-year mortgage loans dropped as well, falling to 3.05% — down from 3.10% last week. It’s the lowest point in MBA survey history.
According to Joel Kan, associate vice president of economic and industry forecasting, rates may not be that low on refinances, which could be causing the dip in applications.
“There are indications that refinance rates are not decreasing to the same extent as rates for home purchase loans, and that could explain last week’s decline in refinances,” Kan said. “Many lenders are still operating at full capacity and working through operational challenges, ultimately limiting the number of applications they are able to accept.”
Refinances accounted for 63.3% of all loan applications for the week. That’s down from 64.3% the week prior.
More in mortgage and housing news
- The share of mortgage loans in forbearance dropped once again. According to MBA, 6.93% of homeowners are currently in forbearance — or about 3.4 million.
- Home prices rose at the fastest pace in two years this July, according to CoreLogic. They rose 4.78% from July 2019 to July 2020. Home prices rose the most in Phoenix (9.2%), Seattle (7%), and Charlotte, North Carolina (6%).
- A new report from Realtor.com shows that inventory problems are worse in the country’s suburbs. Competition is stiffer, too. Online home shoppers are up 56.4% in suburban areas.
- According to a new analysis from Zillow, a homeowner who bought last August could save more than $80 per month and nearly $30,000 across a 30-year loan term by refinancing today.
The week in mortgage rates
Interest rates decreased on all loan types this week, with the exception of 15-year, fixed-rate loans. Those saw a slight, .01% increase from last week.
Here’s how rates looked for each one:
- Conforming 30-year, fixed-rate loans: 3.05%, 0.52 points
- Jumbo 30-year, fixed-rate loans: 3.33%, 0.39 points
- FHA 30-year, fixed-rate loans: 3.15%, 0.43 points
- 15-year, fixed-rate loans: 2.65%, 0.49 points
- 5/1 adjustable-rate mortgages: 2.95%, 0.55 points
Check back here next week for the latest mortgage rates.
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