Mortgage Rates Fall To 18-Month Low

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According to the Mortgage Bankers Association’s Weekly Applications Survey, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances fell to its lowest level since May 2013 last week. The average rate for home loans backed by the Federal Housing Administration and 15-year fixed-rate mortgages also declined, though rates on jumbo loans saw a slight increase. Falling interest rates didn’t lead to boosted demand, however. In fact, the Market Composite Index – which measures total loan application demand – was down 7.3 percent, due to a 13 percent drop in refinance activity. Michael Fratantoni, MBA’s chief economist, said the holiday week likely delayed homeowners from acting on the drop in rates. But though some of that slowdown can be linked to Thanksgiving, the week’s results do include an adjustment for the holiday. Demand for home purchase loans, on the other hand, increased, rising 3 percent from the week before. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

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