Lower Interest Rates Help Housing Market Shake Off Government Shutdown
With interest rates falling to their lowest level in almost five months, mortgage applications managed to climb last week and appear set to place any effects from the government shutdown in the rear-view mirror.
According to the Mortgage Bankers Association’s latest report, for the week ended October 25, loan applications jumped 6.4 percent on a seasonally-adjusted basis from one week earlier — the 8th gain in 25 weeks. That followed a drop of 0.6 percent in the previous week. The figure includes both refinancing and home purchase demand and covers more than 75 percent of all domestic retail residential mortgage applications.
The industry group’s refinance index surged 9 percent from a week earlier. Overall, the refinance share of mortgage activity accounted for 67 percent of total applications, which is 2 percent higher from a week earlier and 10 percent above its lowest level since April 2010. The unadjusted purchase index gained 2 percent, but has now been below year-ago levels for five consecutive weeks.