Is the Housing Market Still Struggling With Affordability Issues?
Despite a slight decline in interest rates, mortgage applications and refinancing activity are still struggling to gain momentum as home prices rise across the nation. In the latest update from the Mortgage Bankers Association, for the week ended February 7, applications for home loans fell 2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, mortgage applications edged only 0.2 percent higher 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 also edged lower, while the Purchase Index dropped 5 percent from the previous week. The unadjusted Purchase Index was 13 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. The average interest rate for a 30-year fixed-rate mortgage decreased from 4.47 percent to 4.45 percent, which is the lowest rate since November. Meanwhile, the average rate for a 15-year fixed-rate mortgage fell from 3.53 percent to 3.49 percent.