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November 22, 2014

As Rates Fall, Loan Demand Rises Again

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As Rates Fall, Loan Demand Rises Again

Mortgage applications bounced back in the most recent week as interest rates fell, offering some temporary relief to borrowers, the Mortgage Bankers Association reported Wednesday. 

The MBA’s index of mortgage application activity, which reflects both refinancing and home purchase demand, increased 5.5 percent for the week ending Sept. 13. The previous week the index had posted an 11.2 percent gain. 

This week, the purchase index, viewed as a leading indicator of future home sales, jumped 7 percent during the week. 

Meanwhile, the refinancing index increased 4.9 percent. Two weeks ago, the refinancing index had dropped to its lowest level since June 2009 as mortgage rates had risen. 

The MBA reports that the 30-year fixed-rate mortgage eased 13 basis points last week, averaging 4.62 percent. Earlier this month, 30-year rates had matched a 4.8 percent high for the year. 

Source: “U.S. mortgage applications gain as rates slip - MBA,” Reuters (Sept. 25, 2013) and “U.S. Mortgage Applications Rose 5.5% Last Week,” The Wall Street Journal (Sept. 25, 2013)

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