The Mortgage Bankers Association reported today that applications for home loans notched a massive decline last week. The industry group’s market composite index plummeted by 13.5% compared to the previous seven-day period. This marks the eighth time in 10 weeks the index has headed lower. At the present level, it’s off its May high by 58.7%.
There’s little question that higher mortgage rates are to blame for the overall downward trend. Since the first week of May, the average rate on a conforming 30-year fixed-rate mortgage has skyrocketed, going from 3.35% all the way up to 4.57% today. The magnitude and speed of the advance have been unprecedented.
Applications to refinance existing mortgages have been the hardest hit by the hike in rates. But even with this in mind, last week was still an anomaly, falling by a staggering 20% on a seasonally adjusted basis. Over the last four months, they’re off by 70%. And over the same time period, they’ve gone from a 76% share of overall mortgage application activity down to 57%.
Many notary loan signing agents have not yet reacted to these changes. Work has dried up significantly and they are on the same track. I have seen only a few change direction and move into field inspections.
SOFIBlog.com ... 352-324-6042 Florida 