Fewer home buyers and refinancers took advantage of the lowest rate of the year last week. Total mortgage applications—including for refinancings and home purchases—dropped by 1.8 percent week over week, the Mortgage Bankers Association reported Wednesday. Mortgage applications are now down 23.5 percent from the same week a year ago.
Even low mortgage rates don’t seem to be enough incentive to spark greater activity among homeowners and would-be home buyers. The 30-year fixed-rate mortgage dropped to its lowest level of 2017, averaging 4.22 percent last week, the MBA reports.
“Mortgage rates dropped to their lowest level since November 2016, as geopolitical tensions continued to rise,” says Mike Fratantoni, the MBA’s chief economist. Nevertheless, “rates are still too high to attract much interest from homeowners looking to refinance, and purchase activity was relatively weak.”
Home purchase applications dropped 3 percent compared to the previous week and are 1 percent below year-ago levels, the MBA reports. Applications for refinancings rose slightly by 0.2 percent week over week, but are down 41.5 percent from a year ago.
“We do expect a pickup in purchase activity through the remainder of the spring season,” Fratantoni says. “With a strong job market and signs of continuing economic growth, we are forecasting roughly 9 percent growth in purchase origination volume for 2017 relative to 2016.”
Source: “Mortgage Applications Drop 1.8%, Despite Lowest Interest Rates Since November,” CNBC (April 19, 2017)
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