According to the Mortgage Bankers Association's Weekly Applications Survey, average mortgage rates saw their biggest decline in two years last week. Rates fell across all loan categories, including 30-year fixed-rate loans with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans.
Joel Kan, MBA's associate vice president of economic and industry forecasting, says lower rates could help spark more buying activity. “The drop in rates led to increases in both refinance and purchase applications, but compared to a year ago, activity is still depressed,” Kan said. “Lower mortgage rates, combined with signs of more inventory coming to the market, could lead to a rebound in purchase activity.”
Last week, mortgage application demand was up 1.2 percent, with a 2 percent increase in refinance activity and a 1 percent bump in demand for loans to buy homes. The MBA's weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications.