Rate Uptick, Buyer Setback

Overall mortgage application volume was down 5.6 percent week-over-week, according to the latest index data from the Mortgage Bankers Association. 

Meanwhile, refinance volume helped boost overall volume 24 percent annually. CNBC reports that the latest shift in volume shows how rate-sensitive buyers and borrowers are in today's market--rates fell for four consecutive weeks to a more than one year-low before ticking up to 4.40 percent. Mike Fratantoni, MBA’s chief economist, says, “As quickly as refinance activity increased in recent weeks, it backed down again in response to the rise in rates,” adding, “this spring’s lower borrowing costs, coupled with the strong job market, continue to push purchase application volume much higher.”

The sharp drop in mortgage rates in the past month had caused a huge jump in refinances, but those applications fell 11 percent last week. Mortgage rates are still a quarter of a percentage point lower than they were a year ago, but so many borrowers have already refinanced at even lower rates that the pool of potential applicants is tiny. Applications were 42 percent higher than a year ago, but again, given the minuscule base of applications, the percentage moves are skewing larger.

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