Mortgage Applications Rise Amid a Dip in Rates
Mortgage rates continued to decline this week according to Freddie Mac, dropping to 2.93% from 2.96% last week. This drop resulted in an increase in both purchase and refi applications.
According to the Mortgage Banker’s Association, purchase applications increased by 2% over the last week on a seasonally adjusted basis while refinances were up 6%, leaving mortgage application volume up 4.2% overall. Still, it’s worth noting that both indexes were down considerably on a year-over-year basis.
Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting, had this to say about the increased activity:
“Both purchase and refinance applications were up, including a 5.5 percent gain in refinances. The jump in refinances was the result of the 30-year fixed rate falling for the third straight week to 3.11 percent — the lowest since early May. U.S. Treasury yields have slid because of the uncertainty in the financial markets regarding inflation and how the Federal Reserve may act over the next few months. Purchase activity also rebounded, even as supply constraints continue to slow the housing market”
Speaking of supply constraints, Freddie Mac forecasts that we’re likely to remain in a seller’s market through the summer, owing in large part to the inventory shortage. Only time will tell how the decrease in rates and spike in demand will impact the current state of the market.
More in mortgage & housing news
- Bloomberg reports that the housing gap widens as new construction booms.
- According to HousingWire, NAR reports that current inventory levels fall short by more than 5.5 million homes.
- In a recent note, Fannie Mae gave the go-ahead for lenders to use third-party vendors to help verify income and asset information.
This week in mortgage rates
Mortgage rates fell this week, with the exception of 15-year, fixed-rate loans, which rose slightly.
Here’s how rates looked for each loan type:
- Conforming 30-year, fixed-rate loans: 2.93% (down from 2.96%)
- 15-year, fixed-rate loans: 2.24% (up from 2.23%)
- 5/1 adjustable-rate loans: 2.52% (down from 2.55%)
Check back next week for the latest in mortgage news.
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