The latest data from the Mortgage Bankers Association’s Weekly Application Survey show a strong reaction to the market among prospective homebuyers and those wishing to refinance their existing home loans. There are two main factors: The Federal Reserve’s cutting of interest rates and the ongoing trade war with China.
The 30-year fixed-rate mortgage dropped by 15 basis points from the previous week, which was the largest decrease in over three months. In the latest weekly application survey, the share of refinancing activity rose by 3% to 53% of all mortgage activity. Interestingly, refinancing activity of government mortgage loans responded more strongly to the decline in rates than did conventional mortgage loans, increasing to levels not seen since November 2016.

While refinancing demand was high, purchasing activity slipped by 2% on a seasonally adjusted basis, but was still 7% higher than what it was a year ago. This bodes well for future home sales activity, and a small rebound for single-family permits.

Tags: conventional loans, federal reserve board, government insured loans, mortgage applications, mortgage bankers association, refinancing