According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell last week for 30-year fixed-rate mortgages with conforming loan balances.
However, the drop failed to move homebuyers, despite having rates almost the lowest they’ve ever been.
In fact, demand for loans to buy homes fell from the week before. So why haven’t favorable rates spurred a buying boom? Though low mortgage rates are good for buyers and help ease affordability conditions, they aren’t the only factor affecting how many buyers are active in the market. For example, high home prices and a lack of affordable homes for sale are currently playing a role in limiting sales. The good news is that
Demand for purchase loans isn’t as responsive to mortgage rate fluctuations as refinance activity – which is now at a three-year high, and is 180 percent higher than it was last year at the same time. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications.