Is Market Volatility Giving Buyers Cold Feet?
February 14, 2018
It seems a 1,000-plus point drop in the stock market last week mixed with rising interest rates may have been enough to give homeowners and buyers the jitters. Overall mortgage applications last week dipped 4.1 percent week over week on a seasonally adjusted basis, the Mortgage Bankers Association reported Wednesday.
Read more: Don't Panic Over Stock Market Mayhem
Broken out, mortgage applications for home purchases plunged 6 percent last week. However, that number is still 4 percent higher than last year. Home buyers complain of weakened affordability and lengthier home searches in research released this week by the National Association of Home Builders. Refinance applications dipped 2 percent last week, but they remain 2.8 percent higher than the same week a year ago.
"Refinance activity is continuing along a floor, while the drop in purchase may be related to short-term stock market jitters," says Joel Kan, an MBA economist. "We still expect activity to pick up as we make our way into early spring."
Mortgage rates continue to move upwards. Last week the 30-year fixed-rate mortgage rose to its highest rate since January 2014, averaging 4.57 percent, the MBA reported.
Source: “Stock Jitters and Higher Interest Rates Drive Weekly Mortgage Applications Down 4.1%,” CNBC (Feb. 14, 2018)
Updated: October 15, 2019