Demand for Purchase Loans Surges on Low Rates
The demand for purchase loans, which serves as a major indicator of future home sales, reached its highest level last week since June, the Mortgage Bankers Association reports. Mortgage applications for home purchases rose 1 percent last week over the previous week.
“It seems as though low interest rates and stable prices are starting to stir the interest of potential buyers,” says Michael Moran, an economist at Daiwa Securities America in New York.
Still, while applications for purchases were up, refinancings were down for the week ending Oct. 12, which caused the overall index that measures mortgage application activity to drop 4.2 percent. The refinance portion of that index fell 5.3 percent last week.
Meanwhile, 30-year fixed-rate mortgages averaged 3.57 percent last week and remain near all-time lows, MBA reports.