Market Update: June 20, 2014

June 23, 2014

Applications for new mortgages recently dropped 9.2 percent from the week prior, according to the Mortgage Bankers Association's Weekly Application Survey for the week ending June 13. "Interest rates increased relative to the previous week, as incoming economic data continues to suggest a pickup in the pace of growth," said Mike Fratantoni, MBA's chief economist. "Although the average rate for the week was up only a few basis points, the increase was matched by a large drop in refinance volume, and purchase application volume also declined. Some lenders continue to report that they have pre-approved borrowers who have been unable to find a property given the tight inventory in certain markets." As a result, mortgage rates dropped again the following week, coming in at an average interest rate of 4.17 percent with 0.6 point on a 30-year fixed-rate mortgage for the week ending June 19, according to mortgage giant Freddie Mac. The 15-year FRM fell to 3.30 percent with an average of 0.5 point, and the 5-year Treasury-indexed hybrid adjustable rate mortgage fell to 3.00 percent with an average of 0.4 point. The 1-year Treasury-indexed ARM was the only loan product to rise, coming in at 2.41 percent. The fall in mortgage applications alongside a rise in interest suggests that buyers are thinking hard about mortgage rates. Now that rates have come back down again, agents would be wise to instruct their clients to move fast.