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Homebuyers are benefiting from lower mortgage rates and slower summer for sellers, which is driving up mortgage applications.
The total volume of mortgage applications increased by 2% last week from the previous week, according to the seasonally adjusted index of the Mortgage Bankers Association. Volume was up 69% from the same week a year ago when interest rates were much higher. The results of the week include an adjustment for Labor Day.
The average contractual interest rate for 30-year fixed rate mortgages with matching balances ($ 484,350 or less) decreased from 3.87% to 3.82%, and by 0.34 percentage points. at 0.34% (plus points) for 20% Loans Payment.
Low rates, combined with more moderate real estate prices and more desperate sellers, bring all buyers back into the market. Mortgage applications for the purchase of a home increased by 5% for the week and 9% more than the same week a year ago. More and more homes are entering the market after Labor Day, marking the end of the summer crisis. Some agents say that spring has been particularly slow, so much of this demand may have been pushed into the fall.
Dallas real estate agent, Kelley McMahon, said she was witnessing a stronger fall but a more difficult buyer.
"I have the impression that there is more inventory than in the past.Usually, in the fall, I am a little slower, but I do not feel like I'm a little slower. I have not slowed down at all, "said McMahon. "I have the impression that there are a lot of houses coming to the market, but if their price is not right, they will stay a little bit."
The lowest mortgage rates in about three years have not pushed mortgage refinancing applications much higher, at least for the week. They had increased only 0.4% over the previous week. They were still 169% higher than the same week a year ago, while the average 30-year fixed rate was 102 basis points higher at 4.84%.
"The refinancings have remained essentially unchanged, but the month of August was overall the most active month in 2019," said Joel Kan, an economist at the MBA.
Mortgage rates have fallen over most of last week and some lenders say that it is precisely at this point that potential refinancers stop, hoping they will go even lower. By the end of the week, however, rates have soared and are now at the highest level for more than a month.
"This recent break with long-term lows is far more threatening as two of the last four business days have seen the biggest jumps in a single day for several months," said Matthew Graham, Mortgage Operations Manager. News Daily. "As a result, the average lender is back at the bid rates last offered in early August."
The sudden rise could boost the refinancing market this week, as borrowers fear the recent lows will be over for a while.
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