Mortgage Demand Climbs As Rates Drop

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According to the Mortgage Bankers Association’s Weekly Applications Survey, demand for loans to buy homes increased 12 percent last week. The spike brought the seasonally adjusted Purchase Index to its highest level since July. Refinance activity also rose, climbing 1 percent over the previous week. Still, as a share of total mortgage application volume, refinance activity fell to 61 percent from 63 percent the week before. The overall improvement – which saw total demand for mortgage applications up 4.9 percent – may be due, in part, to an adjustment for the Veterans Day holiday, which could have skewed numbers higher. Still, mortgage rates fell on 30-year fixed-rate loans with both conforming and jumbo balances, as well as mortgages backed by the Federal Housing Administration. Rates on 15-year fixed-rate loans were unchanged from the week before. Low mortgage rates, combined with continued economic improvement, are expected to release pent-up housing demand and help boost home sales in the coming year. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgages. More  here.

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