Applications for mortgages increased last week as a result of the drop in mortgage rates. According to the American Bankers Association, total mortgage application volume grew by 2.5% last week, as compared with the prior week. The average 30-year fixed rate mortgage for balances under $726,000 fell to 7.61%, from 7.86%. The decrease was directly proportional to the impact of the Fed to resist raising rates in November, which they attributed to a slower job market. Also, applications for refinancing increased by 2%.
According to the Mortgage Bankers Association, mortgage rates are approximately where they were this time last November. Many of those individuals looking to refinance took advantage of the low rates two years ago. According to the Mortgage Bankers Association, current homeowners are carrying mortgage rates below 4%.
The fact that demand has risen and mortgage rates have decreased may be an encouraging sign with this market as home prices continue to remain at the relatively same levels.
Another sign that the market is leveling off is that sellers are cutting prices at a very fast clip. According to a recent article in Fortune Magazine, 7% of homes for sale in the US recorded a price drop during the four weeks ended on October 29th.
It will probably be necessary for us to continue to track the trajectory of the market. As of November 1st, the average mortgage rate on a 30-year fixed loan was 7.95%, according to Bankrate. We will see whether this trend of lower mortgage rates will attract buyers back into the market.
If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.
Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single-family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.
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