Last week, the numbers of mortgage applications fell more than two percent year on year. Applications for refinancing are down 4 percent showing 38 percent lower from last year.
Interest rates for mortgage loans and refinance are at their lowest since November. But customers note it is not same lows compared to last year. Hence, overall mortgage volume is falling significantly. One more factor that contributes to lower borrower interest is decreasing sales.
Potential home buyers are still struggling to find affordable dream homes in the middle of a shaky economy. MBA seasonally adjusted weekly read was 2.3 percent lower over the previous week. This is a notable decrease in total mortgage application volume. Homeowners refinancing their loans is on a decline too. They fell 2 percent over last week. Home mortgage refinances loans application are now nearly 41 percent down year on year.
The normal home mortgage scenario: points rose to 0.43 from 0.39, as originations fees were included for conventional 80 percent loan to value ratio home loans. The good news is decreasing in average contract interest rates for the 30-year fixed-rate mortgage. These home mortgage loans had conforming balances of $ 424,100 or less. Rates decreased from 4.12 to 4.11, making it lowest since November 2016.
According to MBA economist, Joel Kan, “Mortgage rates generally fell, but not as low as they had in 2016.” He says borrowers more interested in looking for a home mortgage refinance loans are still waiting for a larger decrease in rates before they take decisive steps.
Home buying activities across the country are lagging. Mortgage applications by home buyers fell 3 percent for the week and are only 4 percent higher than what they were a year ago. However, realty industry is applauding the fact that yearly gains for home buying applications are still on the positive side even though they have been lessening of late. One of the reasons could be a decrease in the supply of homes for sales. Potential home buyers are finding it more and more difficult to select a dream home they can afford. This year’s June month saw a new high in home prices nationwide on the S&P CoreLogic Case-Shiller home price index.
Home mortgage refinance loans are always affected by many factors. Increasing tensions surrounding North Korea, launching a missile over Japan skies and recent storms have left mortgage marketplace in the doldrums. Consumers across the country may show more optimism towards economy, job changes and housing market. However, when it comes to buying homes, they are more reserved than ever before.
Home buyers activities and refinancing volumes are greatly sensitive. Even the smallest movement in rates up or down affects these numbers. It is a sad fact that mortgage rates, which had jumped after the November elections have no reasons to come down to benefits borrowers. Last week data releases indicate strong economic growth but hawkish comments of Fed officials pushed up mortgage interest rates. They have now reached their highest level since July.
Home buyers seem to be less worried about mortgage rates, which are fortunately at historical lows. They seem to be more diligent in searching for affordable homes they dream of moving into. Surprisingly, more activity in higher price ranges indicates more supply of homes for sale in the upscale market and almost nil at the entry levels.
Home buyers application numbers do not tally with latest surveys. These surveys indicate there is home buyers among renters are much more optimistic today. According to Fannie Mae, more people are looking at current times as good times to buy. This is despite the fact that home prices gains are moving upwards across the nation.