As real estate heads into its busy spring season, consumers aren't showing typically large demand for mortgage loans just yet. Total mortgage application volume, which includes refinances and home purchases, dropped 2 percent week over week for the week ending Feb. 17, the Mortgage Bankers Association reports. Total mortgage volume has plunged nearly 21 percent from a year ago.
Refinancing applications has shouldered most of the blame for the decrease; homeowners have had less incentive to refinance as mortgage rates rise. Refinance volume was down 1 percent week over week, reaching its lowest level so far this year. It is now down 40 percent from a year ago.
However, "purchase applications are not increasing as fast as is typically expected at this time of the year," says Joel Kan, the MBA's associate vice president of industry surveys and forecasting. Purchase applications dropped 3 percent week over week on a seasonally adjusted basis.
The 30-year fixed-rate mortgage averaged 4.36 percent last week, up from 4.32 percent the prior week, the MBA reports. "Rates were up last week as markets assessed that the Fed might increase rates sooner than expected on the strength of a recent pick-up in inflation readings," Kan says.
Source: “Mortgage Applications Fall 2% as Buyers Slow to Start Spring Shopping Season,” CNBC (Feb. 22, 2017)
