Mortgage applications reversed course last week after a brief rebound the week before. Total volume for refinancings and home purchases plunged 4.6 percent on a seasonally adjusted week-over-week basis, the Mortgage Bankers Association reported Wednesday. The index is now 19 percent lower than the same week a year ago.
Home purchase applications faced the biggest drops last week, falling 6 percent week over week, the MBA reports. Economists say that rising interest rates likely had less to do with the drop than the shortage of homes for sale. Inventories of homes for-sale remain low across the country. Nevertheless, purchase applications still remain 10 percent higher than the same week a year ago.
The average loan amount on purchase applications is moving higher. Last week, the average loan amount was $317,000, which is the highest since May, the MBA reports.
Meanwhile, applications for refinancing, which tend to be influenced more by interest rates, dropped 3 percent last week. Refinancing applications are down 36 percent from a year ago.
The 30-year fixed-rate mortgage averaged 4.18 percent last week, up from 4.14 percent in the previous week, the MBA reports. That marks the highest average since July.
Source: “Weekly Mortgage Applications Fall 4.6% as Rates Rise,” CNBC (Oct. 25, 2017)
