Loan Demand Eases, Refinancers Recede
March 23, 2016
Mortgage rates held steady last week but that didn’t keep loan applications from slowing even further. Total mortgage application volume – which includes refinance and home purchase applications – fell 3.3 percent on a week-to-week, seasonally adjusted basis last week, the Mortgage Bankers Association reports.
The good news is that it was mostly a drop in refinancings that was behind the decrease. Refinance volume fell 5 percent compared to the previous week, and is 4.5 percent lower than a year ago.
Check out last week's report from the MBA.
"There are fewer borrowers remaining who are able to benefit from low rates," says Lynn Fisher, MBA's vice president of research and economics. "The decline in average refinance loan size is also a feature of a declining refinance market. Borrowers with larger loan balances tend to be more rate-sensitive. As refinance applications surge, average loan size tends to go up. As we return to a more normal level of refinance applications, the mix of borrowers returns to normal and average loan size declines."
Loan applications for home purchases dropped 1 percent last week. However, purchase applications remain 25 percent higher than a year ago. The average 30-year fixed-rate mortgage decreased slightly to 3.93 percent from 3.94 percent last week, MBA reports.
Source: “Mortgage Applications Fall 3.3% as Rates Hold,” CNBC (March 23, 2016)
Updated: June 18, 2018