Mortgage applications drop in US housing market

23 August, 2019 12:00 AM printer

WASHINGTON: Mortgage applications decreased in the United States as mortgage rate remained low, according to a report from Mortgage Bankers Association (MBA) on Wednesday.

For the week ending Aug. 16, MBA’s market composite index, a measure of mortgage loan application volume, decreased 0.9 percent from a week earlier, reports Xinhua.

MBA’s purchase index before seasonal adjustment dropped 5 percent from the previous week. After removing the influences of predictable seasonal patterns, the seasonally adjusted purchase index still dropped 4 percent from a week earlier, according to MBA.

“Lower mortgage rates have yet to lead to a notable rise in homebuyer demand,” said Joel Kan, associate vice president of economic and industry forecasting of MBA.

“Purchase applications fell more than 3 percent, but were still 5 percent higher than a year ago,” Kan said.

Besides, the refinance index, which measures the activity to replace higher rate mortgages with lower rate mortgages, edged up 0.4 percent from the previous week, according to MBA.

“In a week where worries over global economic growth drove U.S. Treasury yields 13 basis points lower, the 30-year fixed mortgage rate decreased just three basis points,” said Kan. “As a result, the refinance index saw only a slight increase but remained at its highest level since July 2016.”

“The small moves in rates and refinancing are potentially signs that lenders may be approaching capacity constraints as they continue to deal with the largest wave of refinance activity in three years,” said Kan.