Frederick J. Brown | AFP | Getty Images
Homebuyers are rushing for mortgages, but fewer homeowners are refinancing, even as rates are heading toward record lows.
Total mortgage application volume fell 2% from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Volume was 35% higher than a year ago.
The annual benefit is getting a big boost to homebuyers. The mortgage application to buy the house fell 2% for the week, but was 28% higher than a year ago. Last year, annual gains for purchase demand were in the low single digits.
Joel Kahn, an MBA economist, said, “Lenders are reporting that strong demand for homebuying is coming from delayed activity from the spring, as well as homes seeking more space in less densely populated areas.”
Demand is also near record low mortgage rates. The average contract interest rate for a 30% fixed rate mortgage for 30%, with a balance corresponding to $ 510,400, decreased from 3.11% to 3.08%, including the basic fee, from 0.38 to 0.36 to 0.36% for loans with a 20% down payment. done.
The fall in rates slightly affected the existing borrowers. Applications to refinance home loans were reduced by 3% for the week, although they were up 40% from a year earlier. Earlier this year, refinancing was up nearly 100% annually.
“Traditional and government refinancing activity plummeted last week, despite a decline in 30-year and 15-year fixed mortgage rates, with historical debt declining,” Kahn said. Refinancing demand may slow and will not rise again without another significant drop in rates. ”
According to Mortgage News Daily, mortgage rates are falling again this week, now at a three-week low. Part of this is due to the recent announcement that a new fee levied on lenders that was initially the reason for the rates to be increased will be delayed by the end of the year. Another part is simple bond basics.
“The Fed is offering to buy short-term markets and more bonds, which are buying longer-term with less concern about inflation data,” said Matthew Graham, chief operating officer of Mortgage News Daily.