Numbers Count: Mortgage applications surge in early October
Numbers count. They matter to bankers and to prospective homebuyers, sellers, and real estate professionals. Here’s my take on the key numbers on the housing market this week.The numbers: Mortgage applications increased 25.5% in the week ending Oct. 2 from the prior week, according to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey released Oct. 7. Purchase applications rose 27% and refinance applications rose 24% from the previous week. What counts: This was a huge jump in mortgage applications. Two factors to note:
- Rates: Mortgage rates fell to below 4% – their lowest level since last spring, according to the report. Rates had risen for several weeks on expectations the Federal Reserve would start raising rates in September. Mixed economic signs lately mean the outlook for a Fed rate hike is somewhat unclear. So homeowners considering refinancing may still have time to take advantage of relatively low rates. Potential homebuyers may be able to relax and not feel they need to rush to get a mortgage before rates start climbing.
- New disclosures: The Mortgage Bankers Association pointed out that the jump in mortgage applications was due in part to a rush to submit applications prior to mortgage disclosures changes that took effect Oct. 3. As we’ve written about recently on our blog, these improved disclosures may cause some delays in loan applications in the early going as lenders, real estate agents, and consumers become familiar with the new forms and the procedures for processing the forms. The new disclosures make it easier for consumers to compare mortgage loan offers from various lenders and provide clearer details around all the costs of a mortgage.