Loan Demand Slips After Recent Spike

November 26, 2014

Even a drop in mortgage rates couldn’t keep loan demand up in the latest week, according to the Mortgage Bankers Association’s seasonally adjusted index of loan activity. Mortgage applications dropped 4.3 percent last week compared to the previous week, rolling back after a recent surge in activity, according to the MBA’s index, reflecting the week ending Nov. 21. 

Broken out, applications for refinancings dropped 4 percent compared to the prior week while applications for home purchases, viewed as a gauge of future home buying activity, decreased 5 percent. The drop in home purchase applications followed a 12 percent climb the previous week. Purchase applications are about 10 percent year ago levels, the MBA reports.

Meanwhile, the 30-year fixed-rate mortgage continued to ease, decreasing to 4.15 percent last week from 4.18 percent the week prior, according to the MBA. The MBA said that rates have moved even lower since then. 

"Rates took a nice little dip today on a combination of another strong Treasury Auction and big month-end trading/hedging," Matthew Graham of Mortgage News Daily told CNBC earlier this week. "Thirty-year fixed is arguably 3.875 percent again for top-tier scenarios, but it's neck and neck with 4 percent."

Source: “Mortgage Volume Drops Back Again After Recent Gains,” CNBC (Nov. 26, 2014)