Mortgage rates fall. So do home purchase applications.(Read article summary)
Mortgage rates for 30-year fixed loan declines to 4.78 percent, according to mortgage bankers' survey.
The Mortgage Bankers Association (MBA) publishes the results of a weekly applications survey that covers roughly 50 percent of all residential mortgage originations and tracks the average interest rate for 30 year and 15 year fixed rate mortgages, 1 year ARMs as well as application volume for both purchase and refinance applications.
The purchase application index has been highlighted as a particularly important data series as it very broadly captures the demand side of residential real estate for both new and existing home purchases.
The latest data is showing that the average rate for a 30 year fixed rate mortgage declined 15 basis point to 4.78% since last week while the purchase application volume declined 3.7% and the refinance application volume increased 4.90% over the same period.
It's important to note that rates have been, more or less, trending up for about eleven weeks now and coincidentally somewhat in-line with the Fed making QE2 official.
While early scuttlebutt about QE2 measures worked to depress mortgage rates earlier this year, it appears that the actual implementation of the measures is not currently working to force them down any lower resulting in continued poor trends for purchase and refinance activity.
The purchase application volume remains near the lowest level seen in well over a decade while refinance activity continues to slow.
Could the Fed have reached a limit on the long end of the rate curve? We will have to wait to find out.
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