Homebuyers have been hesitant to jump into the mortgage market even though interest rates have hit the lowest levels in five months. Last week, mortgage applications decreased by 1.8 percent from the previous week, stated the Mortgage Bankers Association. Volume is down almost 24 percent from exactly one year ago.
Average contract interest rates for 30 year fixed rate mortgages dropped to its lowest levels since November 2016. "Mortgage rates dropped to their lowest level since November 2016, as geopolitical tensions continued to rise," Mike Fratantoni, MBA chief economist said. He added "rates are still too high to attract much interest from homeowners looking to refinance, and purchase activity was relatively weak."
"We do expect a pickup in purchase activity through the remainder of the spring season. With a strong job market and signs of continuing economic growth, we are forecasting roughly 9 percent growth in purchase origination volume for 2017 relative to 2016," Fratantoni said.