Mortgage applications rise as refinancing increases
“Mortgage
rates dropped to their lowest level in the survey, going back to 1990, as
incoming data continue to indicate that economic growth has slowed,” he
said.
Rates on
30-year fixed mortgages averaged 4.55 percent, down 0.05 percentage points from
the previous week, the lowest level since the survey has been conducted weekly
since 1990.
Interest
rates also were below their level at this time last year of 5.24 percent.
Low rates
have sparked refinancing, which can put cash into consumers’ hands to pay off
debt or make other purchases needed to boost the economic recovery.
“With
rates this low, many borrowers who refinanced in the past two years may well
have an incentive to refinance again, and this is likely increasing refi
application activity,” Fratantoni said.
The
housing market has lost steam since the April 30 expiration of homebuyer tax
credits that provided up to $8,000. To take advantage of the tax credits,
buyers had to sign contracts by April 30 and close by Sept. 30.
Existing
home sales were down 27.2 percent in July, the slowest pace in 15 years, and
new home sales dropped 12.4 percent last month, according to separate Commerce
Department reports on Tuesday and today.
The MBA’s
seasonally adjusted purchase index, a tentative early indicator of home sales,
increased 0.6 percent.
The MBA said fixed 15-year mortgage rates averaged 3.91
percent, down from the previous week’s 3.99 percent, a record low.
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