Mortgage Rates Drop After Upward Trend

So far this year, average mortgage rates have been more up than down. But, according to the Mortgage Bankers Association’s Weekly Applications Survey, rates took a break last week, with slight declines in the contract interest rate for 30-year fixed-rate mortgages with conforming loan balances and loans backed by the Federal Housing Administration. Joel Kan, an MBA economist, told CNBC the rate decline was due to several factors. “Treasury rates declined slightly on average last week, as a mixed bag of economic news and geopolitical concerns made investors more cautious overall,” Kan said. “A significant driver of the decline was retail sales data showing less than expected spending by U.S. households for the third month.” Still, despite the rate decline, mortgage application demand was down from the week before. Mostly, this was due to a drop in refinance activity, as demand for loans to buy homes was up 1 percent and is now 6 percent higher than at the same time last year. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

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