Mortgage rates dropped last week, but that didn’t seem to push homeowners or home buyers to take advantage. Total mortgage applications—for home purchases and refinances—dropped 0.4 percent for the week. Volume is now 6 percent lower than a year ago, the Mortgage Bankers Association reported Wednesday.
Refinance applications, which tend to be the most rate-sensitive, dropped 1 percent last week and are now 18 percent lower than a year ago. Mortgage rates were considerably lower a year ago when compared to today.
In what should be a prime time for homebuying, mortgage applications for home purchases were essentially flat last week, dropping 0.2 percent. Home purchase applications are barely 3 percent higher than a year ago, the MBA reports.
Homeowners and home buyers are facing higher financing costs. Mortgage rates have been moving higher since the beginning of the year and were at their highest averages in more than four years last month. But last week rates offered some relief, with the 30-year fixed-rate mortgage falling slightly to 4.78 percent.
"Mortgage rates dipped slightly last week driven mainly by concerns about global growth," says Joel Kan, an MBA economist. "The refinance index continued to slip and was at its lowest since 2008, as was the refinance share of applications."
Source: “A Brief Respite for Interest Rates Fails to Spur Mortgage Applications,” CNBC (May 9, 2018)
