US Mortgages Drop 1.8 Percent From Last Week

Fewer homebuyers jumped into the mortgage market last week even though interest rates hit their lowest levels in five months.

Total mortgage applications decreased last week by 1.8 percent from the previous week, according to the Mortgage Bankers Association. Total volume is down 23.5 percent from the same week last year.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) dropped to its lowest levels since November, dropping to 4.22 percent from 4.28 percent, with points falling to 0.35 from 0.38 (including the origination fee) for 80 percent loan-to-value ratio loans.

“Mortgage rates dropped to their lowest level since November 2016, as geopolitical tensions continued to rise,” said MBA chief economist Mike Fratantoni. However, he added, “rates are still too high to attract much interest from homeowners looking to refinance, and purchase activity was relatively weak.”

Applications to purchase a home fell 3 percent from the previous week and 1 percent from a year ago. Refinance applications increased only slightly by 0.2 percent from a week ago, but are down 41.5 percent from last year. Refinance applications increased to 42.4 percent of total applications, up from 41.6 percent the previous week.

The MBA doesn’t expect the mortgage market to remain slow through the season.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza