According to reports from the Washington based Mortgage Bankers Association MBA, the market index composite fell 0.7% to 327.2 in the close of January alone. This the body says is the poorest to be recorded in 3 weeks. In the survey, the contract rate on the 30-year fixed loan was seen to have had a 0.4 % increase from its initial 5.11% while the benchmark of application to buy a house and refinance one fell 2.7% to 400.6 in mid-January. Prior to this, it stood at 411.8 which happens to be the highest recorded since February of 2018.
In a report on Redfin, it is estimated that the average interest rate on the 30-year fixed-rate mortgages with a capital equivalence of $484,500 or less ascended with just 0.5% difference to 4.75% from its initial 4.74% mark in the previous week. In spite of the slight increase, it was the lowest figures stakeholders have recorded since April of 2018.
The slight fall in mortgage interest rates was not good enough to entice home buyers after 2 weeks of noticeable increase says Alexander Romanov, Iwillbuyhouse’s co-founder and a prolific real estate investor in Seattle.
“Following the reports from MBA, we could see that there is a significant decline in the number mortgage loan applications for the month of January. After remaining at 278.5% for almost a decade, the application rate was seen to fall to 272.5% in the previous week,” Romanov added on Thursday.
The weekly measure of loan applications conducted by MBA for refinancing a home had a 5.3% decrease from 1,110.5 to 1,172.4. The last time the decrease was this high was in March of 2018.
As for the total number of applications recorded for last week, MBA had it that the refinancing share dropped to 44.5% from its initial 46.8%. This the group says is the biggest since the first month of 2018. In the same vein, application for adjustable-rate mortgages also dropped from its initial share of 9.2 % to 8.3%. MBA claims that this is the biggest drop in almost half a decade.
Real estate experts in the expensive areas of the country such as New Jersey, Connecticut, and Rhode Island claim that the decline is as a result of the imbalance in supply and demand ratio and weakness in affordability. Furthermore, despite the increase in the supply of homes especially at the entry level, the prices of homes across the country have continued to rise on monthly basis. The biggest issue, however, according to a survey conducted by Zillow, it is sited that a good number of people across the country are finding it hard to save for the huge amount of cash for down payments despite low-interest rates.