Mortgage applications decrease in U.S. housing market

Source: Xinhua | 2020-01-10

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

For the week ending Jan. 3, MBA's market composite index, a measure of mortgage loan application volume, decreased 1.5 percent from two weeks earlier.

"Mortgage rates dropped last week, as investors sought safety in U.S. Treasury securities as a result of the events in the Middle East, with the 30-year fixed mortgage rate declining to its lowest level (3.91 percent) since early October," said Mike Fratantoni, senior vice president and chief economist of MBA.

Besides, the refinance index, which measures the activity to replace higher rate mortgages with lower rate mortgages, decreased 8 percent from two weeks ago, according to MBA.

"Despite lower rates, refinance volume decreased these last two weeks, and we expect that it will slowly trail off in the first half of 2020 as long as mortgage rates remain in this same narrow range," said Fratantoni.

"Homeowners would need to see a sharp drop in rates to reinvigorate the refinance wave seen in 2019," Fratantoni added.

MBA's purchase index before seasonal adjustment decreased 14 percent from two weeks ago. After removing the influences of predictable seasonal patterns, the seasonally adjusted purchase index increased 5 percent from two weeks earlier, according to MBA.