Mortgage demand roars back to life as interest rates dip below 7%
Payne Capital Management President Ryan Payne weighs in on the U.S. economy, arguing that purchasing power will continue to ‘strengthen’ for the American people.
A key measure of home-purchase applications surged last week as mortgage rates dipped below 7% for the first time in more than a month.
The Mortgage Bankers Association's (MBA) index of mortgage applications jumped 7.1% for the week ended March 8, compared with a 9.7% increase the previous week, according to new data published Wednesday.
The data also showed that the average rate on the popular 30-year loan dropped to 6.87% last week.
«Mortgage rates dropped below 7% last week for most loan types because of incoming economic data showing a weaker service sector and a less robust job market, with an increase in the unemployment rate and downward revisions to job growth in prior months,» said Mike Fratantoni, MBA's chief economist.
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A home for sale in Cupertino, California, on Feb. 7. (Loren Elliott/Bloomberg via Getty Images / Getty Images)
Housing demand had ground to a halt earlier this year as rates moved higher, but it is stirring back to life as rates start to fall. Applications for a mortgage to purchase a home rose 5% from the previous week. Application volume is down 11% compared with the same time last year.
Demand for refinancing also climbed higher last week, rising 12% from the previous week, according to the survey. Compared with the same time last year, refinance applications are up 5%.
«While these percentage increases are large, the level of refinance activity remains quite low, and we expect that most of this activity reflects borrowers who took out a loan at or near the peak of
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