Mortgage Refinancing Demand Falls To Lowest In More Than A Year

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People wait to visit a home for sale in Garden City, Nassau County, NY on September 6, 2020.

Xinhua News Agency | Getty Images

It was a mixed week for rates: at first they were high and then dropped slightly, but the damage was done early.

According to the seasonally adjusted index of the Association of Mortgage Bankers, the total volume of applications for mortgages for the week decreased by 3.7%.

The average contractual interest rate for 30-year fixed-rate mortgages with associated loan balances ($ 548,250 or less) decreased to 3.27% from 3.36%, while the interest rate decreased to 0.33. 0.43 (including processing fees) for loans with a 20% reduction in payment.

“Buy and refinancing applications declined, with most of the pullback occurring earlier in the week when rates were higher,” said Joel Kahn, MBA’s deputy vice president of economic and industry forecasting. – Refinancing activity has declined in nine of the last 10 weeks. as rates rose from 2.92% to 3.27% over the same period. “

Home loan refinancing applications fell 5% over the week. Demand was 31% lower than a year ago and the lowest level in more than a year. Most borrowers have already refinanced at lower rates or cannot qualify for refinancing at today’s rates. The share of refinancing mortgage activities fell to 59.2% of the total number of applications from 60.3% in the previous week.

Mortgage applications for home purchases fell 1% over the week, but was 51% higher than a year ago, although year-to-year comparisons will deviate sharply next month as the housing market stalled at the onset of the pandemic and then rebounded. sharp. Purchase demand is lower than in the same week of 2019.

“The decline in buying activity for the third consecutive week is a sign that rising house prices and limited supply are limiting home sales, especially in the lower price tiers,” added Kahn.

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