East Coast Snow Slows Mortgage Demand

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell again last week. Rates dropped across all loan categories, including 30-year fixed-rate mortgages with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. Despite the lowest rates in months, however, demand for mortgages was down from the week before – mostly due to a 7 percent decline in the number of requests for applications to purchase homes. Michael Fratantoni, MBA’s chief economist, told CNBC blizzard conditions on the East Coast may be behind the decline in mortgage demand. “Mortgage rates fell below 4 percent in our survey for the first time since October 2015. The jumbo rate also decreased and was at its lowest level since April 2015,” Fratantoni said. “Despite the fall in rates, mortgage application activity was likely muted by the major East Coast snowstorm, although refinance activity increased very slightly.” Even though purchase application demand was down from the week before, it remains 17 percent higher than 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. More here.

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