Mortgage Applications Jump as Home-buyers Seize their Opportunity
Jul 11th, 2018 @ 8:52 PM by Amber Nelson
As mortgage interest rates fell and real estate inventory declines slowed, more potential home-buyers applied for home loans this week, according to the Mortgage Bankers Association (MBA).
The MBA’s Weekly Mortgage Applications Survey found that home purchase mortgage requests jumped by 7% in the latest week, bring total application volume up for the first time in two weeks.
The MBA credited low unemployment rates for the gain. “The strong job market continues to bolster demand for homes,” said MBA chief economist Mike Fratantoni.
The National Association of Realtors, however, cited inventory changes as the bigger factor. “Even though inventories continue to decline, they are doing so at a slower pace. In other words, while buyers continue to see fewer homes available for sale, the decline was smaller than we’ve seen in previous months,” said Danielle Hale, chief economist for Realtor.com. “Before we see inventories increase, we need to see them slow, and the data has shown four months of deceleration (smaller year-over-year declines).”
During the same week, mortgage rates fell to an average of 4.76% with 0.43 point, down from 4.79% the week before. That was not enough of a drop to lure borrowers into refinance loans. Refinance request volume decreased 4%, falling to their lowest level since December 2000. Refinance applications made up just 34.8% of total mortgage applications, down from 37.2% the previous week and a low not seen since August 2008.
Total mortgage application volume is 4.3% lower than it was one year ago, mostly because of the decline in refinancing.
The adjustable rate mortgage (ARM) share of mortgage applications decreased to 6.3%. Federal loans were a mixed-bag, with the FHA share of loan request falling to 10.0% from 10.2% while VA loans rose to 11.3% from 10.7%. USDA loans accounted for 0.8% of all mortgage loans, unchanged from the week before.
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to Loan.com and Mortgage101.com.