Drop in Rates Still Doesn’t Budge Loan Demand
May 30, 2018
Mortgage rates eased last week following recent increases, but would-be home buyers or refinancers didn’t bite. Total mortgage application volume, which reflects for refinancings and home buying, dropped 2.9 percent last week on a seasonally adjusted basis, the Mortgage Bankers Association reported Wednesday. This marked the sixth consecutive week of losses in applications.
Mortgage application volume is now 10 percent lower than a year ago, the MBA reports.
Refinance volume made up most of the drop last week, falling 5 percent week over week and reaching the lowest level since December 2000. Refinance volume was nearly 27 percent lower than a year ago, when mortgage rates were much lower.
Mortgage applications for home purchases dropped 2 percent last week but remain 2 percent higher compared to a year ago, the MBA reports.
The 30-year mortgage rate averaged 4.84 percent last week, down from 4.86 percent the previous week.
"Rates slipped slightly over the week as concerns over U.S. trade policy and global growth sent some investors back to safer U.S. Treasurys,” says Joel Kan, a spokesman for the Mortgage Bankers Association. “Minutes from the most recent FOMC meeting also yielded a more dovish tone, which added to the downward pressure in rates.”
Updated: August 07, 2020