Mortgage Rates Move Up, So Does Buyer Demand
Posted by Jamie Russen on
According to the Mortgage Bankers Association's Weekly Applications Survey, average mortgage rates moved up across all loan categories last week. Increases were seen on 30-year fixed-rate loans with both conforming and jumbo balances, as well as loans backed by the Federal Housing Administration and 15-year fixed-rate mortgages. Though rates remain low by historical standards, last week's increase slowed refinance demand – which dropped 2 percent from the previous week. Lynn Fisher, MBA's vice president of research and economics, told CNBC that falling refinance activity has affected average loan size due to the fact that even minor interest rate fluctuations can have a significant effect on larger loans. “Mortgage markets continued to retrench last week,” Fisher said. “Declining refinance activity was accompanied by falling average loan sizes for refinance applications, which have decreased for the third consecutive week after reaching their survey peak.” Purchase demand, on the other hand, was up from the week before. The 4 percent jump in prospective buyers requesting loan applications pushed purchase activity 30 percent above where it was at the same time last year. The MBA's weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications.