Housing Market Receives Small Lift From Lower Interest Rates
With interest rates declining to multi-month lows, mortgage applications and refinancing activity received a slight increase in the latest update from the Mortgage Bankers Association. For the week ended January 31, applications for home loans gained 0.4 percent on a seasonally adjusted basis from one week earlier.
On an unadjusted basis, mortgage applications jumped 14 percent from the prior week. There have only been a handful of increases over the past nine months as the housing market is starting to return to a more sustainable pace. The Refinance Index increased 3 percent, while the Purchase Index dropped 4 percent from the previous week. The unadjusted Purchase Index surged 14 percent compared with the previous week but was still 17 percent lower than the same week one year ago.
Overall, the refinance share of mortgage activity accounted for 62 percent of total applications, unchanged from a week earlier. Interest rates rebounded higher in the final months of 2013 but have since moved lower as turmoil in emerging markets and the stock market have investors finding safety in U.S. Treasuries. In fact, the 10-year Treasury yield reached a new three-month low earlier this week.