Mortgage applications to buy a home rebounded last week after a two-month slump.
Applications for the purchase of loans increased by 4 percent, seasonally adjusted, according to the index of the Association of Mortgage Bankers.
The rise ended a “slump” that has taken over the purchasing market over the past seven weeks, said Joel Kan, head of MBA’s industrial forecasts.
However, refinancing activity declined. MBA applications to track index refinancing last week fell 2 percent compared to last week’s survey. Although the refinancing index continued to rise 98 percent year on year, Kan noted that the combination of small refinancing balances and reduced demand may indicate less activity in the future.
“The average balance of the refinanced loan of $ 291,000 was the lowest since January last week,” he said in a statement. “Many borrowers with higher loan balances could have acted earlier in the current wave of refinancing.”
The situation could be exacerbated by the tightening of credit criteria. According to the MBA, the offer of mortgages, which reflects the availability of mortgage financing, reached a six-year low in September. At the national level, borrowers with lower incomes or bad credit histories are still unable to take advantage of low mortgage rates.
The decline in refinancing applications, which accounted for approximately 70 percent of the MBA survey on all housing loans, limited the overall index to 0.3 percent weekly growth. The MBA survey has been conducted every week since 1990 and covers approximately 75 percent of the mortgage market.
The average 30-year fixed-rate mortgage rate rose to 2.99 percent from 2.98 percent a week ago. For jumbo loans, the average rate fell by two basis points to 3.11 percent from 3.13 percent.