On Wednesday, the Mortgage Bankers Association released data showing a sharp drop of 0.7% in mortgage applications from a week prior. The MBA’s report blamed higher interest rates on fixed-rate mortgages as the cause for the downturn. Currently, these rates are at a two-year high.
The housing industry watchdog said 30-year fixed-rate conforming mortgages averaged 4.27%, up from 4.23% the previous week. Conforming loans with balances of $417,000 or less are guaranteed by Fannie Mae and Freddie Mac; however, interest rates on ‘jumbo loan’ mortgages greater than $417,000 were also at a two-year high.
The announcement comes on the heels of statements last week by MBA chief economist, Mike Fratanatoni, who expressed optimism for new purchase mortgages despite a recent 9.4% drop in applications. Fratanatoni attributed the downturn to higher interest rates and a 16% drop in refinances for existing homeowners.
This post was published at Schiffgold on DECEMBER 8, 2016.
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