The Rising Prices Does Not Dissuade Homebuyers From Applying For Bigger Mortgages

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Amanda Byford
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According to the Mortgage Bankers Association’s seasonally adjusted index, last week the mortgage loan applications fell 4% in comparison to the previous week. 

Yet the volume was higher by 2% for the same week last year, when the housing market was raising its head up after the pandemic shut it down.

Joel Kan, an MBA economist said there was a drop in purchase applications for both conventional and government loans.

Even when the building material shortages and higher costs are restricting purchase activity, the demand for buying a home is getting stronger.

The prices are continuing to climb at the fastest pace in over 15 years, resulting in the average purchase loan balance also climb. 

In the 2nd week of this month, the average hit $411,400 the highest since February.

The average rate for 30-year fixed-rate mortgages with conforming loan balances increased from 3.11% to 3.15% with points increasing from 0.32 to 0.36 for loans with a 20% down payment.

The rate was still lower than it was in March, giving the borrowers an opportunity to save on monthly payments. 

Refinance home loan applications increased 4% from last week but were 2% lower than the same time the previous year. 

The refinance share of mortgage activity increased from 61.3% to 63.3% of total applications.

He added that the refinance application volatility will continue if the rates are going to be at current levels.

Reference Source: CNBC

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