Rate Drop First In More Than Two Months

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates were mostly down last week. Rates for 30-year fixed-rate loans with conforming loan balances, loans backed by the Federal Housing Administration, 15-year fixed-rate loans, and 5/1 ARMs all fell from the week before. It was the first time mortgage rates decreased in more than two months. Joel Kan, MBA’s vice president and deputy chief economist, says higher rates have been holding back demand. “These elevated rates continue to put pressure on both purchase and refinance activity and have added to the ongoing affordability challenges impacting the broader housing market, as seen in the deteriorating trends in housing starts and home sales,” Kan said. Last week, though, demand was relatively flat from one week earlier, with overall mortgage application demand 0.5 lower week-over-week. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

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