Despite Dropping Rates, Loan Demand Softens
February 12, 2014
Loan demand for home mortgages dropped last week by 2 percent compared to the previous week, with both applications for home purchases and refinancings falling, the Mortgage Bankers Association reported Wednesday.
The MBA’s seasonally adjusted index showed that mortgage applications for refinancings slipped 0.2 percent in the week ending Feb. 7, while applications for home purchases, viewed as a leading gauge of future home buying activity, dropped 5 percent.
The MBA’s index had hit its lowest point since December 2000 at the end of last year. Loan demand took a tumble after the U.S. Federal Reserve had announced it would begin tapering its $85 billion per month bond-buying stimulus program, which had been helping to keep interest rates near record lows in recent years.
For the week ending Feb. 7, the MBA reports, the interest rate on the 30-year fixed-rate mortgage averaged 4.45 percent during the week, down two basis points over the previous week.
Source: “U.S. Mortgage Applications Fall in Latest Week: MBA,” Reuters (Feb. 12, 2014)
Updated: November 25, 2020