Mortgage demand perks up as rates cool
XLY•US mortgage demand rose 6.2% last week as the average 30-year fixed contract rate fell 9 basis points to 7.21%. Purchase-loan applications increased 7.7%, while refinancing applications fell 4.5%.
1. Demand rises as rates dip
The average 30-year fixed mortgage contract rate fell 9 basis points to 7.21%, its lowest level in a month and a half. Applications for loans to purchase homes rose 7.7%, refinancing applications declined 4.5%, and total mortgage demand increased 6.2% last week.
2. Credit availability improves
Mortgage credit availability rose in October after two months of declines, the Mortgage Bankers Association said. Deputy chief economist Joel Kan said lenders increased offerings of adjustable-rate loans for lower loan-to-value borrowers, including some that allow cash-out refinancing; the jumbo index reached its highest level in three months.
3. Housing stocks recover some ground
The 30-year fixed rate was 0.84 percentage points higher than in the same week a year earlier. Over that period, purchase applications fell 18.2% and refinancing demand declined 56.7%. Year to date, the S&P 1500 Homebuilding Index was down 0.7% and the PHLX Housing Sector Index was down 2.2%, compared with a 9.9% gain for the S&P 500; both housing indexes had been down about 14% last month.
