Saturday
August 2, 2014

Fed’s Taper Talk Deflates Loan Demand

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Fed’s Taper Talk Deflates Loan Demand

Mortgage applications fell last week on the heels of the Federal Reserve’s announcement that it would start to taper its bond-buying stimulus program after the first of the year.

Mortgage applications dropped 6.3 percent on a seasonally adjusted basis, the Mortgage Bankers Association reports. This marked the second consecutive week of drops in loan demand. 

Refinancing applications dropped 8 percent while applications for home purchases, viewed as a leading gauge of future home-buying activity, fell 4 percent last week. 

Mortgage applications for home purchases are down 11 percent compared to one year ago, MBA reports. 

“Following the Federal Reserve’s taper announcement, mortgage application volume dropped again last week, with rates increasing and refinance application volume falling to its lowest level since November 2008,” says Mike Fratantoni, MBA’s vice president of research and economics. 

Source: “Mortgage applications drop in wake of Fed's taper,” HousingWire (Dec. 24, 2013)

Read more: 

Fed: By End of 2014, Stimulus Will Be Over