Dive Brief:
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Last week’s dip in mortgage rates — now below 4% for the first time in 18 months — was expected to propel more consumers to buy homes. But most of the applicants for mortgage loans since then have been from homeowners who want to refinance, not purchase.
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The Mortgage Bankers Association reported an 11.6% rise in loan applications, as refinance requests jumped to their highest level since November.
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The interest rate for a 30-year, fixed-rate mortgage averaged 3.97% last week, down from 4.12% a week earlier and 4.28% in October 2013.
Dive Insight:
That the ultra-low interest rate had no immediate impact on the number of applications from homebuyers, some economists said, indicates that mortgage rates are not a factor in stopping consumers from purchasing houses. They point instead to a lack of credit availability, driven by requirements for qualifying for mortgages.