What we thought to be a sure thing has not materialized: a spike in mortgage rates. It seems that there is some movement in terms of activity in the mortgage market: part of that activity can be traced back to a renewed interest in refinancing. Nationally, the Mortgage Bankers Association reported that total mortgage application volume rose 2.7% for the week. Notwithstanding, it is far from the stampede that was recorded a year ago, when volume was 18% higher as compared to the same week in 2016. The refinance share of mortgage activity increased to 44.0% of total applications from 42.4% the previous week.
In its announcement, the Mortgage Bankers Association reported that, “The Market Composite Index, a measure of mortgage loan application volume, increased 2.7% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 3% compared with the previous week.”
According to the report, the size of the average refinance loan increased slightly but are still down 34% from where they were in 2016.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $424,100 or less decreased to 4.20% from 4.22%.
The larger problem, as cited in earlier blog posts, are the constrained inventories across the nation.