Thursday
August 25, 2016

Buyers Rushed to Lock in Loans Last Week

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Buyers Rushed to Lock in Loans Last Week

Loan applications for home purchases didn’t see any slow down from the Thanksgiving holiday last week. Applications for home purchases, viewed as a leading gauge for future home sales, rose 8 percent week-to-week on a seasonally adjusted basis, according to the Mortgage Bankers Association.

Applications for home purchases are now 30 percent higher than the same week one year ago.

“It may be that buyers are rushing in now, concerned that interest rates will move decidedly higher at the start of 2016,” CNBC reports.

But a stall in refinancing applications last week contributed to a total decrease in mortgage applications, falling 0.2 percent on a seasonally adjusted basis for the week ending November 27, according to the MBA. (Total applications include those for refinancings and home purchases.) Refinance applications alone fell 6 percent week-to-week on a seasonally adjusted basis.

“Volume always drops significantly during Thanksgiving week,” says Michael Fratantoni, chief economist for the MBA. “However, even after adjusting for the holiday, with rates little changed last week, refinance volume slipped to its lowest level since late July.”

Mortgage rates mostly held flat during the holiday week but continue to be at a higher level than most of the year. The average on a 30-year fixed-rate mortgage fell to 4.12 percent from 4.14 percent the previous week, according to the MBA.

Source: “Mortgage Applications Slide 0.2%, Hurt By Refinancings,” CNBC (Dec. 2, 2015)