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December 20, 2014

Lower Rates Aren't Lifting Loan Demand

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Lower Rates Aren't Lifting Loan Demand

Lower mortgage rates in recent weeks aren’t triggering a pickup in mortgage applications. For the fifth time in the past six weeks, mortgage applications dropped nationwide, according to the Mortgage Bankers Association’s index. The MBA’s index, which reflects applications for refinancing and home purchases, dropped 0.2 percent for the week ending June 27, after falling 1 percent the week before.

Recent MBA Mortgage Reports

Broken out, applications for home purchases, viewed as a leading gauge of future home sales, fell 0.7 percent last week while applications for refinancing ticked up slightly at 0.1 percent last week.

Meanwhile, the MBA reported that the average 30-year fixed-rate mortgage dropped to 4.28 percent last week from 4.33 percent. The average rate on a 15-year mortgage dropped to 3.42 percent from 3.47 percent.

The MBA’s index reflects about 75 percent of the residential mortgage market.

Source: “U.S. Mortgage Applications Dropped Again Last Week,” Bloomberg (July 2, 2014)