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Mortgage Applications Fall 4.3% for January

Posted by Jose Marc Castro on Feb 26, 2016 09:32 AM EST
Mortgage Bankers Hold Nat'l Conference in S.F more big
SAN FRANCISCO - OCTOBER 20: Fannie Mae President and CEO Herbert Allison is seen projected on a video screen as he speaks during the 2008 Mortgage Banker's Association Conference and Expo October 20, 2008 in San Francisco, California. The aanual Mortgage Banker's conference runs through October 22. (Photo : Justin Sullivan/Getty Images)

Mortgage applications experienced a slight drop in volume in January. According to a recent report from CNBC, the said drop was attributed to the slight hike in interest rates. In total, the said drop totaled 4.3 percent on a seasonally adjusted basis for the week ending February 19.

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The said findings were announced by the Mortgage Bankers Association. The said adjustment took into account for the recent President's day holiday.

Refinance volume had been moving upwards in the past few weeks and for the same period above, fell by 8 percent from the previous week. This seasonally adjusted rating also took into consideration the recent holiday.

On the other hand, mortgage applications for the purpose of purchasing a home had jumped 2 percent for the same week. Compared to figures attained for the same week a year ago, the current rate is 27 percentage points higher.

According to MBA Chief Economist Michael Fratantoni, "The dollar volume of refinance application decreased by 26 percent while refinance applications based on loan count decreased 17 percent indicating that the volume of larger loans dropped to a greater extent than smaller loans."

An earlier report from the Conference Board, as published in the Washington Post, said that that the consumer confidence index had fallen to its lowest level in seven months. This is an indicia of pessimism in the market, forcing many investors to seek more secure placements for their money. The biggest turn out went into bonds, specifically ten year Treasury notes. With more placements, bond yields fell further bottoming out at 1.65 percent before climbing again.

The Federal Home Loan Mortgage Corp pegged the 30 year fixed rate average to a low rate of 3.62 percent averaging at 0.6 of a point. This is the lowest level in over a year. This rate had not moved upwards in seven weeks and the previous lowest rate was registered last February 2015.

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