Mortgage Applications Decline But Mortgage Rates Continue Rising

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Peoples Home Equity shares data and comments on this week's change in mortgage applications and rates.

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The average 30-year rate increased for the fourth consecutive week to 4%.

Peoples Home Equity was disappointed to see mortgage applications decline for the 3rd consecutive week in a row. However, the fall in financing demand did not curb the increase in mortgage rates.

As shown on, mortgage applications fell -3.5% for the week of May 9th. This follows two weeks of prior declines at -4.6% and -2.3%. The 4 week average change in applications was previously at -1.72%, but is now at -2.02%. However, the 8 week average is at 0.51%, which is better than the national average of 0.49% from the time TradingEconomics began recording in 2007.

The decline in applications seems to have had zero effect on rates. The average 30-year rate increased for the fourth consecutive week to 4%. Four weeks ago, the 30-year rate was at 3.83%, then increased to 3.85%, then to 3.93%, and finally to 4% this week.

The increase in rates only confirms that the demand for housing is building and lenders are preparing for a Fed rates hike. Peoples Home Equity thinks buyers, especially first-time home buyers, should submit their applications as fast as possible to lock in an affordable rate while it’s still available. If a buyer is confused about how much they can borrow, or how much a monthly mortgage payment may cost, they should consider using the calculator tools on the website.

Typically, home sales increase continuously from April to late August, sometimes from March to September; this means it is still early in a growing demand season. Peoples Home Equity is confident that more and more individuals will apply for loans, causing them to seek out properties in a real estate environment where inventories are low; this will only lead to higher property prices. Again, buyers should be pre-approved for a home loan now if they want to compete with the growing number of pre-approved Americans bidding on the limited number of properties available for sale.

If you listing a property for sale and/or are in need of a mortgage for a new home, contact a Peoples Home Equity loan officer today at: 262-563-4026

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Giorgio U Ferrero
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