Real Estate News

Mortgage rates, applications go in opposite directions

Published: 30 Jun 2017

As evidence of the way different statistics in housing can follow their own paths, the last week in June saw divergent trends for mortgage rates and mortgage application volume. Both may depend on the overall context of their respective patterns for the full effect.

Mortgage rates
First, there's the mortgage rates as of June 28, 2017. Bankrate said that two of the three main types rose during the past week to reach a higher level on Wednesday. Of these, 30-year fixed mortgages rose the highest, increasing eight points within the span of a week, while 5/1 Adjustable Rate Mortgages only increased by 5 points during the same time, the two of them hitting figures of 3.84 and 3.19 percent, respectively. By contrast, the 15-year fixed-mortgage rate didn't fall but stayed the same.

NerdWallet listed some of the trends of the earlier weeks for the same mortgage products. According to this listing, the days between June 15 and 22 were relatively stable ones for all of the different mortgage types. This measurement also said that the 5/1 ARM rates were on an upward tick in the early days of June, from the beginning of the month to June 15.     

Mortgage application volumes
While some mortgage rates rose, the volume of mortgage loan applications reportedly fell. This is based on the activity of the Market Composite Index, which reportedly dropped 7 percentage points between June 16 and June 23. As is often the case, there were some upward trends for different, related qualities within this same Index and the various mortgages it accounted for.

For example, the source reported on the amount of FHA and USDA application shares in this time: The USDA shares stayed the same while the FHA share increased by .2 percentage points. Other rates were unchanged as well, such as the average contract interest rate 30-year fixed-rate mortgages with conforming loan balances. Jumbo loan balances with the same rate length grew by .1 percent point. 

The release from the MBA also mentioned the refinance activity seen recently as well. This included the mortgage share, which dropped from 46.6 to 45.6 percent, while the Refinance Index went down by 9 percent.

Speaking to The Atlanta Journal-Constitution, Minnesota real estate agent, Kris Lindahl, stated that the average down payment has decreased.

"It's been my experience that about half of my clients know that there are loans and/or programs that require less than 20 percent down," Lindahl said. "The other half still think that they must have at least 20 percent down in order to qualify for a home mortgage."

If this change bears out, it could also be encouragement for immediate investment.