Mortgage applications dropped for the 3rd consecutive week according to the Mortgage Bankers Association’s weekly survey of applications. Mortgage applications dropped by 19.2% during the week ending February 22. Refinance applications declined by 30%, which appears to highlight the difficulties homeowners are experiencing due to falling home prices and tighter mortgage lending standards.
To take a step back from week-to-week news for a moment before moving on to recent developments, a little historical perspective reveals just how low mortgage rates are these days. For a month-and-a-half now, thirty-year mortgage rates have been below 6.0%. How low is that? In thirty-six years of mortgage data, there have only been three years in which mortgage rates averaged below 6.0%. In none of those three years, did those rates stay below 6.0% for the entire year.
In other words, history is clear on two things:
This history lesson gives added power to some recent developments:
It all adds up to reinforce the importance of taking advantage of low interest rates as soon as they become available.
It was a wild week for mortgage news:
In the through-the-looking-glass world of interest rates, where bad economic news is often welcomed as a harbinger of lower rates, the consensus seemed to be rates would continue to fall. However, mortgage shoppers would be wise not to hold out for too long, because the story may not be as simple as all that.
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