Despite some misleading headlines making the rounds last week, an uptick in mortgage loan application volume was actually being driven by a jump in refinancing activity, not purchasing, as we outlined at the time.

And in fact, purchase mortgage application volume in the U.S. has since dropped another 4 percent and remains 18 percent lower than at the same time last year, despite a drop in mortgage rates to a six-month low, the market’s response to which has been “rather tepid,” per the euphemistic words of the Mortgage Bankers Association.

2 thoughts on “Purchase Mortgage Activity Continues to Drop”
  1. I certainly don’t agree with this, but as I was walking by a TV earlier today, I overheard Fundstrat’s Tom Lee on CNBC say that mortgage rates (nationally) “…could drop to something like a 4.75 to 5.2 level next year,” based on a normal spread with the current 10 year Treasury. if that happens (a big if), then expect purchase mortgage application volume to pick up big time.

    1. That drop will be short-lived, not a new trend. Additionally, interest rates will be going down because of a deep recession, not economic improvement. By 2030 you’ll have mortgage well into the double digits, home prices have peaked, most likely for the rest of your life.

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