As interest rates rise, refinances fall – that’s no rocket science!
Applications for mortgage refinancing made up only 58 percent of all mortgage applications during the week ended February 21, down 3 percentage points from the previous week and the lowest market share since last September. According to the Mortgage Bankers Association (MBA) its Refinancing Index was 11 percent lower than the week ended February 14 and almost all other application volume markets fell as well.
MBA’s seasonally adjusted Market Composite Index which measures all application volume was down 8.5 percent and the unadjusted index fell 7.0 percent compared to the previous week. The seasonally adjusted Purchase Index declined 4 percent from the previous week to its lowest level since 1995. Purchase applications rose a slight 0.1 percent from a week earlier but were 15 percent below where they were during the same week in 2013.
“Purchase applications were little changed on an unadjusted basis last week, but this is the time of a year we would expect a significant pickup in purchase activity, and we are not yet seeing it,” said Mike Fratantoni, MBA’s Chief Economist.