Mortgage Applications Fall Despite Low Rates

The average mortgage rate dropped for the first time in four weeks, to the same point it was at prior to the rate hike in October. Despite the relief in rates, mortgage applications continued to fall this week, resulting in a 3% dip from the previous week. Though the last quarter of the year normally sees a slowing in mortgage application activity, a drop in mortgage rates normally corresponds to an increase in applications. Applications for both purchases and refinances fell this week; refinances are currently the leading contributor to mortgage applications, making up almost 60% of new applications this week.

Some analyst point out that the holidays are always slower for the housing market as since consumers are traveling and investing funds in the holidays. They also state that the last quarter is a time for market stabilizing, and that this is a normal trend. Other analyst, however, think that the stabilizing may be fleeting as homes for sale sit on the market for longer periods of time and as more adjustable rate mortgages come due. \r\n