We are over a week into the government shutdown. All sorts are weighing in on what effects a continued shutdown will have on our national economy. Let’s see what last week’s shutdown did in terms of the real estate world.
First, let’s talk about the Mortgage Banker’s Association (MBA), because they are important to today’s post. Here is their description from their website:
“The Mortgage Bankers Association (MBA) is the national association representing the entire real estate finance industry. We are the most influential voice for real estate finance, leading the charge to create a sustainable and vibrant future for all industry participants.”
Each week MBA puts out a Weekly Mortgage Applications Survey. For the survey, they utilize the Market Composite Index to find out the weekly volume of applications for mortgage loans. The survey includes over 75% of the nation’s retail residential mortgage applications.
For the week ending October 4th, the survey showed an increase in mortgage applications of 1.3%–based on its seasonally adjusted index, and 1% based on the unadjusted. The increase included both refinancing and home-buying loans.
Breaking the groups down, the refinancing category went up 3% from the week prior and hasn’t been that high since the beginning of August. Looking at the total of all types of loan applications, the refinancing category rose to 64% from 63% the week earlier.
The home-buying category saw a decrease of 1% from the previous week. Looking at 30-year fixed rate mortgages that fall under $417,000, the survey showed a decrease in the average interest rate. It fell to 4.42% (we talked about that last Friday).
So, while mortgage applications are up, it looks like more people are applying for refinancing loans than home-buying ones. Not a surprise considering the state of our nation at the moment. We’ll see what the next few days and perhaps weeks bring us.
Sources: Mortgage Bankers Association, Reuters, RealtorMag