Continued volatility in US mortgage market
Your Mortgage reported last week how mortgage applications in the country had rocketed following the central bank’s decision not to raise interest rates.
However, this momentum could not be sustained. Figures from the Mortgage Bankers Association showed a 6.7% fall in the number of new mortgage applications this week.
The body pointed to increased volatility in the country’s stock market and overseas financial markets as reasons for the change, thanks in part to the crisis in China.
Applications to purchase a home were down 6% on last week and 20% lower than a year ago, data showed. The number of remortgage loans also tumbled, down 8% week-on-week.
Mortgage rates remained relatively stable during the past week, with the typical interest rate decreasing slightly to 4.09%.
Michael Fratantoni, chief economist for the Mortgage Bankers Association, said that rates were fluticting on a daily basis.
“Once again, the weekly average mortgage rate is not telling the story regarding mortgage application volume,” he said.
“The prior week included days with much lower rates due to volatility around the Fed’s announcement that drove refinance volume up. Last week, a more stable rate produced less volume, as rates at this level just do not provide an incentive for most homeowners to refinance.”