Loan Demand Ticks Up as Borrowers Look to Lock in Rates
June 20, 2018
Mortgage rates have been up and down in recent weeks, so when borrowers saw little fluctuation last week, they jumped at a chance to lock in a rate. Home refinancers, in particular, took advantage.
Total mortgage application volume rose 5.1 percent last week on a seasonally adjusted basis compared to the previous week. The gain was fueled by homeowners who were refinancing. Refinancing applications increased 6 percent for the week. However, such applications remain 31 percent lower than a year ago when interest rates were lower. Mortgage applications for home purchases increased 4 percent last week and are now 3 percent higher than a year ago.
The 30-year fixed-rate mortgage averaged 4.83 percent last week, unchanged from the previous week. "It was a mixed week for rates in [the] MBA's survey,” says Joel Kan, an MBA economist. “Treasury yields finished the week slightly higher as a hawkish statement from the FOMC and market jitters caused by trade concerns and other geopolitical uncertainty offset each other.”
As rates have risen over the last few months, more home buyers are taking out adjustable-rate mortgages, opting for a product with initially lower interest rates that will later rise after a set period. ARMs rose to 7 percent of total applications last week, the MBA reports.
Updated: November 16, 2018