The Mortgage Bankers Association revealed that U.S. borrowers filed the most mortgage applications for both new purchases and refinancing in nearly two months.
The news comes as 30-year home loan costs fell to their lowest levels since early October.
The data shows that consumer requests for a mortgage loan rose 2 percent to 340.5 in the week ended Nov. 30. This was the strongest showing since the week of Oct. 5. The rise is the result of interest rates on 30-year, fixed-rate “conforming” mortgages with balances of $453,100 or less, averaging 5.08 percent last week — the lowest rate since the week of Oct. 5.
“Treasury rates continued to slide last week, driven mainly by concerns over slowing global economic growth and U.S. and China trade uncertainty,” Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a statement, according to Reuters.
MBA’s seasonally adjusted measure on mortgage refinancing rose 6.2 percent to 836.4 last week, rising further above a near 18-year trough reached in the week of Nov. 16.
The news is good, since just last month MBA had warned that rising interest rates were taking a toll on the number of new home mortgages, with applications down 25 percent year over year. In fact, non-bank mortgage lenders reported that their numbers fell by about 3.5 percent between the end of 2017 and the middle of 2018, while the number of mortgage loan originators declined by 7 percent. That means about 11,000 workers at those mortgage firms lost their jobs.
This latest data from MBA shows that while the seasonally adjusted index on loan applications to buy a home went up 0.8 percent, the average loan size fell to $298,000, the lowest amount since December 2017.
“This is perhaps an indication that there are fewer jumbo borrowers, or maybe first-time buyers are having better success reaching the market as we close out the year,” Kan said.
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