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Weekly mortgage applications pull back slightly after strong start to 2020
Prospective buyers and a real estate agent, center, enter a home for sale in Warren, Michigan.Daniel Acker | Bloomberg | Getty ImagesMortgage rates didn’t move last week, and that took a little bit of steam out of the rush on new mortgages that started the year. Total application volume fell 1.2% last week from the…
Prospective buyers and a real estate agent, center, enter a home for sale in Warren, Michigan.
Daniel Acker | Bloomberg | Getty Images
Mortgage rates didn't move last week, and that took a little bit of steam out of the rush on new mortgages that started the year.
Total application volume fell 1.2% last week from the previous week, according to the Mortgage Bankers Association's seasonally adjusted index.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) was unchanged at 3.87%, with points decreasing to 0.27 from 0.32 (including the origination fee) for loans with a 20% down payment.
“Even with more positive developments surrounding the U.S. and China trade negotiations and healthy retail sales data, investors seemed cautious and maintained their demand for safer U.S. Treasurys, which kept yields lower,” said Joel Kan, an MBA economist. “Our expectation is that rates will stay along this same narrow range.”
Applications to refinance a home loan fell 2% for the week, but were 116% higher than a year ago. Last year, the average rate on the 30-year fixed was 88 basis points higher.
“Refinance applications remained near the highest level since October 2019, as the 30-year fixed rate was unchanged at 3.87 percent, while the 15-year fixed rate decreased to its lowest level since November 2016,” Kan said.
Mortgage applications to purchase a home also decreased 2% from a week ago but were 8% higher than a year earlier. Buyer demand is incredibly strong, and as a result the usual spring surge has already started. Unfortunately, the supply of homes for sale is still very low, and that may keep sales lower than they could be, were the more available.
The supply of homes for sale at the end of December was at its lowest point in at least seven years, according to Zillow. Inventory fell 7.5% annually, and despite a surge in housing starts in December, the supply situation is not expected to improve any time soon.
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