According to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey, average mortgage rates fell last week across all loan categories, including 30-year fixed-rate mortgages with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. The decline means that rates remain near three-year lows.
Joel Kan, MBA’s associate vice president of economic and industry forecasting, says falling rates led to a spike in demand for home purchase loans. “Purchase activity was 9 percent higher than last year, continuing the trend of solid year-over-year gains,” Kan said. Buyers may be responding to falling mortgage rates or trying to wrap up their home search before the summer season comes to a close. Whatever their motivation, they definitely returned to the market last week.
In fact, the MBA’s Purchase Index shows the number of Americans requesting applications for loans to buy homes was up 5 percent since last week. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications.