Low mortgage rates are no longer a novelty, hence no
longer a sudden incentive for borrowers. Total mortgage application
volume decreased 4.8 percent on a seasonally adjusted basis for the week
ending February 26th versus the previous week, according to the
Mortgage Bankers Association (MBA). This follows a mini-refinance boom,
as rates fell through January and February to near record lows.
Applications to refinance decreased 7 percent from the previous week, seasonally adjusted, falling to the lowest level since the start of the year. The average amount for refinance loans was $279,200, the lowest since mid-January, when refinances really took off.
"Despite a slight drop in rates, refinance applications decreased overall. Applications for both conventional and government refinance loans decreased, as the supply of borrowers who could benefit from rates at this level begins to diminish," said Joel Kan, MBA's associate vice president for forecasting and industry surveys.
Applications to refinance decreased 7 percent from the previous week, seasonally adjusted, falling to the lowest level since the start of the year. The average amount for refinance loans was $279,200, the lowest since mid-January, when refinances really took off.
"Despite a slight drop in rates, refinance applications decreased overall. Applications for both conventional and government refinance loans decreased, as the supply of borrowers who could benefit from rates at this level begins to diminish," said Joel Kan, MBA's associate vice president for forecasting and industry surveys.
The average contract interest rate for 30-year fixed-rate
mortgages with conforming loan balances ($417,000 or less) decreased to
3.83 percent from 3.85 percent, with points decreasing to 0.39 from 0.42
(including the origination fee) for 80 percent loan-to-value ratio
(LTV) loans, according to the MBA.
Mortgage applications to purchase a home, which are less rate-sensitive, fell 1 percent for the week but are 27 percent higher than the same week one year ago, suggesting a stronger start to the spring 2016 housing market.
Refinance volume will likely move even lower this week, as rates rose sharply to levels not seen in a month.
"It continues to be the case that context is important when discussing rate movement during that time. In fact, early February was approximately when rates leveled-off after a strong move lower to begin 2016," noted Matthew Graham, chief operating officer of Mortgage News Daily. "This range has been narrow enough that all but a few days during the past month have seen contract interest rates at the same level."
Mortgage applications to purchase a home, which are less rate-sensitive, fell 1 percent for the week but are 27 percent higher than the same week one year ago, suggesting a stronger start to the spring 2016 housing market.
Refinance volume will likely move even lower this week, as rates rose sharply to levels not seen in a month.
"It continues to be the case that context is important when discussing rate movement during that time. In fact, early February was approximately when rates leveled-off after a strong move lower to begin 2016," noted Matthew Graham, chief operating officer of Mortgage News Daily. "This range has been narrow enough that all but a few days during the past month have seen contract interest rates at the same level."