Home >> Daily Dose >> Mortgage Applications Down for Fourth Straight Month
Print This Post Print This Post

Mortgage Applications Down for Fourth Straight Month

decreasing-twoAn easing in mortgage interest rates to a near 15-month low did little to spur mortgage application activity throughout the month of September, market reports show.

Compared to August, loan application volumes were down 1 percent in September, macroeconomic research firm Capital Economics reported Wednesday. The company's calculations are based on weekly figures released by the Mortgage Bankers Association (MBA).

The decline came even as mortgage rates hovered at an average 4.32 percent for 30-year fixed-rate loans, slightly above August's average and within the 10-basis-point range interest rates have occupied since May.

"While this is the lowest level for mortgage interest rates since June of 2013, there are few signs that it's stimulating mortgage demand," said Paul Diggle, property economist at Capital Economics.

Refinancing application activity—more dependent on mortgage rates than other products—dipped 2.4 percent in September, turning around after August's 2.0 percent gain and declining to their lowest level since August 2008. Refinance applications have fallen month-over-month in four of the year's first nine months.

With rates expected to rise before the year is out, Diggle expects demand for refinancing will continue to decline.

Meanwhile, home purchase loan applications picked up 0.5 percent month-to-month, barely putting a dent in the declines recorded over the previous three months.

The increase was sparked by a rise in conventional application activity, which was up 0.7 percent in September. That was offset by a 0.1 percent dip in applications for government loans, such as those backed by the Federal Housing Administration (FHA) or the Department of Veterans Affairs.

"With FHA loans traditionally the means by which first-time buyers with small down payments took their first step onto the housing ladder, the weakness of government loan applications is one reason why first-time buyer activity is particularly weak," Diggle said.

In its latest index—measuring the week ending September 26—MBA reported a 0.2 percent weekly decline in applications, with refinances tipping 0.3 percent and purchase loans staying flat.

About Author: Tory Barringer

Tory Barringer began his journalism career in early 2011, working as a writer for the University of Texas at Arlington's student newspaper before joining the DS News team in 2012. In addition to contributing to DSNews.com, he is also the online editor for DS News' sister publication, MReport, which focuses on mortgage banking news.
x

Check Also

Survey: Homeownership Remains Elusive for Baby Boomer Renters

A recent look into housing affordability by NeighborWorks America has found that three in five long-term baby boomer renters feel homeownership remains unattainable.