Lower Rates Spark Higher Loan Demand

October 18, 2017

A slight decrease in mortgage rates brought refinancers and home shoppers back to lenders last week.

Total mortgage application volume for refinancings and home purchases rose 3.6 percent week-over-week on a seasonally adjusted basis, the Mortgage Bankers Association reported Wednesday. However, the volume still is nearly 19 percent below the same week a year ago. Interest rates were lower a year ago.

Home purchase applications increased 4 percent last week and are up 9 percent compared to a year ago, the MBA reports.

Applications for refinancing rose 3 percent, but remain down 36 percent from a year ago.

The 30-year fixed-rate averaged 4.14 percent, down from 4.16 percent the week prior, the MBA reports.
"In the bigger picture, rates are attempting to push lower after rising fairly quickly from early September through early October," Matthew Graham, chief operating officer of Mortgage News Daily, writes.

However, economists say that is likely to change. The recent release of the Federal Open Market Committee minutes showed an increased likelihood of one more rate increase in 2017, which likely would nudge mortgage rates higher too, says Joel Kan, an MBA economist.

Source: “Weekly Mortgage Applications Rise 3.6% After Rates Dip,” CNBC (Oct. 18, 2017)