Home / News / Market Studies / Mortgage Demand Wanes Even as Interest Rates Head Lower
Print This Post Print This Post

Mortgage Demand Wanes Even as Interest Rates Head Lower

Mortgage application volume has fallen for the second straight week, led by a steep drop in home loan refinances even as mortgage interest rates edged downward again.

[IMAGE]

The ""Mortgage Bankers Association"":http://www.mortgagebankers.org (MBA) reported Wednesday that its measure of new mortgage applications decreased 8.9 percent for the week ending September 10, 2010. The trade group's analysis includes an adjustment to account for the Labor Day holiday, and follows a 1.5 percent drop in home loan applications the week prior.

[COLUMN_BREAK]

MBA's index for refinances, which accounted for 80.5 percent of total applications last week, posted a decline of 10.8 percent. The index for new-purchase applications dropped 0.4 percent from one week earlier.

Mortgage interest rates have been lingering at their lowest levels in nearly a half-century for months. The ceded affordability has done little to boost market demand on its own now that the federal homebuyer tax credit has expired, while some existing homeowners looking to take advantage of the window of rock-bottom interest rates have been unable to secure refinancing now that the equity in their home has been depleted.

In ""MBA's last report"":http://dsnews.comarticles/home-purchase-apps-increase-refinances-slip-as-rates-edge-up-mba-2010-09-08, mortgage rates inched upward, but the trade group is reporting a return to declines for long-term rates for the week ending September 10.

MBA says the average contract interest rate for 30-year fixed-rate mortgages decreased to 4.47 percent last week, down from 4.50 percent.

Fifteen-year fixed-rate mortgages dropped to 3.96 percent from 4.00 percent.

The average contract interest rate for one-year adjustable-rate mortgages (ARMs) also decreased, to 6.89 percent.

About Author: Carrie Bay

Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for DSNews.com from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.
x

Check Also

Dip in Rates Brings Resurgence in Bidding Wars

Redfin’s latest analysis of homebuyer trends has found that bidding wars are heating up as mortgage rates have dipped and the nation’s housing supply remains strained.