Mortgage loan application volume in the U.S. slipped 2 percent over the past week according to the Mortgage Bankers Association, and that’s despite the benchmark 30-year mortgage rate having dropped back under 3 percent and the 15-year rate having hit a new all-time low.
And in fact, with both refinancing and purchase activity having dropped, purchase mortgage activity was down 18 percent on a year-over-year basis for the third week in a row, and that’s despite an increase, not decrease, in existing-home inventory and with new home inventory nearing a 13-year high.
People who took the opportunity to refinance due to low rates over the past year have pretty much done so by now. People who chose to purchase a home due to the low rates (often using hefty 401Ks for the down if a first time buyer) have also mostly already done so. Upward pressure on prices is slowing and especially as the economy is showing signs of weakness – one example, the July jobs number was significantly lower than expected.
Ha! First time buyer, closing in a week thanks to low interest rates and loan on my 401k. And here I thought I was special…
UPDATE: While mortgage application volumes ticked up 3 percent over the past week, with a 2 percent increase in applications to refinance and a 1 percent increase in purchase mortgage activity, purchase mortgage activity is still down 18 percent on a year-over-year basis (for the fourth week in a row).