According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates were mostly flat last week, with slight increases for loans backed by the Federal Housing Administration and 30-year fixed-rate loans with both conforming and jumbo balances. But despite flat rates, demand for loans to buy homes was down for the second week in a row. Joel Kan, MBA’s associate vice president of economic and industry forecasting, says home buying demand is being held back by low inventory and higher prices. “Both conventional and government purchase applications declined, but average loan sizes increased for each loan type,” Kan explained. “This is a sign that the competitive purchase market, driven by low housing inventory and high demand, is pushing prices higher and weighing down on activity.” Still, overall demand for mortgage loans was down just 0.9 percent from the week before and purchase demand remains 24 percent higher than last year at this time. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)
