Mortgage Demand Not Affected by Low Rates

Over all, mortgage rates dropped for the first time in months late last week. The industry was hopeful that the falling rates would put a halt to falling loan applications, but the numbers didn’t support that hope. Fixed rate mortgage rates were 6.61% for a 30-year conventional mortgage, down by 0.05 points from the previous week, which had been a four-year record high of 6.69%. Adjustable rate mortgages and 15-year conventional loans also decreased by 0.05 percentage points.

New home sales seem to still be on the rise, but the flip side of the new sales arena is that a longer list of unsold homes exists. Refinances are now up to 35.7% of all total applications taken in May, a slight increase from April. As the conforming mortgage rate topped 6.69% last week, a slight increase in adjustable rate mortgages was seen since the rise of the adjustable index is still lower than a conventional mortgage rate at this time. Analyst are hoping that all these trends put together will spur a leveling of the mortgage industry and possibly a strong summer for the mortgage market.