"Mortgage Applications Cool as Rates Hold Steady"
"Borrower activity remains high after last week's surge, but the Mortgage Bankers Association reports only a slight increase in mortgage loan applications despite falling rates."
The latest report from the Mortgage Bankers Association (MBA) shows that mortgage loan applications are still experiencing high levels of activity, despite a recent decrease in mortgage rates. Last week, the 30-year fixed mortgage rate (FRM) dropped to 6.26%, but this was not enough to keep application growth at its previous pace. The market composite index, which measures mortgage loan applications, only saw a nominal 0.6% increase.
While this may seem like a small change, it is indicative of a cooling trend in the mortgage market. As the weather begins to cool down, so does the growth of mortgage applications. However, this is not a cause for concern, as the overall level of borrower activity remains strong.
With refinance mortgages making up over 60% of all applications, it is clear that many homeowners are taking advantage of the lower rates. Joel Kan, MBA's associate vice president of economic and industry forecasting, stated, "Refinance application volume last week was the lowest in the month of September since 2008, and we anticipate that as the year progresses, lenders will continue to be focused on serving the purchase market and first-time buyers."
Despite the cooling trend, the MBA expects the mortgage market to remain strong in the coming months. Kan added, "Our forecast calls for purchase originations to increase to $1.15 trillion in 2020, the highest amount seen since 2006."
Originally reported by RISMedia