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Rising Applications and Falling Mortgage Rates

As mortgage applications increase, mortgage rates have begun to drop, according to data from the Mortgage Bankers Association (MBA) and Freddie Mac. The MBA’s Market Composite Index, a measure of mortgage loan application volume, rose 1.5 percent from a week earlier, while the 30-year fixed-rate mortgage dropped from 4.10 to 4.08 percent. The average loan size for purchase applications was at $318,700, a survey high.

The declining 30-year fixed-rate mortgage is at a 2017 low, according to Freddie Mac, but still higher than this time last year. During this week a year ago, the 30-year fixed-rate mortgage average 3.58 percent. Still, mortgage rates are declining, and may keep declining as applications increase.

Freddie Mac reports that mortgage rates are declining week-over-week, a trend that has continued over several weeks. Though early March saw a week-over-week jump, rates have declined since then, especially 30-year fixed-rate mortgages.

Other mortgages, such as 15-year fixed-rate mortgages, have seen week-over-week declines as well, though not as drastic. The average rate for a 15-year fixed-rate mortgage dropped from 3.36 percent to 3.34 percent week-over-week.

Additionally, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) decreased to 4.28 percent from 4.34 percent, with points increasing to 0.38 from 0.31 for 80 percent loan-to-value ratio loans. The effective rate decreased from last week.

As rates decline, refinances have declined with them. The refinance share of mortgage activity saw a decrease to 41.6 percent of total applications from the previous weeks 42.6 percent, according to the MBA. This is the lowest level since September 2008.

While 15-year and 30-year fixed rate mortgage application volume has declined, the MBA reports that adjustable-rate mortgages remained unchanged.

Read more about the MBA's survey here, and Freddie Mac's data here.

About Author: Seth Welborn

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