More buyers moved to lock in rates last week, as mortgage costs dipped to their lowest average of the year. Total mortgage application activity—which includes loans for homebuying and refinancing—increased 1.5 percent last week on a seasonally adjusted basis, the Mortgage Bankers Association reported Wednesday. Purchase applications made up most of that increase, rising 5 percent week-over-week and now sitting 3 percent higher than the same week a year ago.
"The spring housing market is off to a solid start," says Michael Fratantoni, MBA’s chief economist. "Despite the relatively weak job report for March, job growth is averaging almost 180,000 [a month] so far this year, providing a strong support for the home purchase market."
Lower mortgage rates were also an incentive last week for buyers to lock in rates. Interest rates dropped for the third consecutive week, with the 30-year fixed-rate mortgage averaging 4.28 percent, a new low for 2017, MBA reports.
Still, mortgage rates are higher than they were in the fall, which has left fewer borrowers with reason to refinance. As such, applications for refinancings last week were 40 percent lower than the same week a year ago.
Source: “Mortgage Applications Rise 1.5 Percent as Interest Rates Fall to 2017 Low,” CNBC (April 12, 2017)