Despite Low Rates, Mortgage Apps Fall

Despite continued record low mortgage rates, mortgage applications for refinancings and home purchases dropped 7.1 percent for the week ending June 22, the Mortgage Bankers Association reports.

Separated out, refinancing applications dropped by 8.3 percent alone for the week while home purchase applications–which are a gauge for future home purchases–fell 1.4 percent for the week, MBA reports.

Michael Fratantoni, MBA’s vice president of research and economics, said the drop in mortgage applications this week mostly stemmed from a drop in refinance applications for government-backed loans. Last week, applications for government mortgage refinancing more than doubled, surging 121.3 percent and reaching an all-time high.

“The large swings in activity [this week] were due to the implementation of [the Federal Housing Authority’s] new premiums on streamline refinances, and borrowers timing their application to lower their premiums,” Fratantoni said in a statement.

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