Weekly Mortgage Applications Fall But Rates Continue Rising

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Peoples Home Equity comments on the latest mortgage application figures.

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Peoples Home Equity would not be surprised if the average quoted 30-year rate increases again and again for the next consecutive weeks.

Lenders like Peoples Home Equity were disappointed this week when they reviewed the latest mortgage application figures.

As shown on TradingEconomics.com, mortgage applications for the week ending on May 16th declined -1.5%. This marks the fourth consecutive week that mortgage applications have declined. The four week average has now declined from -2.02% to -2.97%.

At the same time, the average quoted 30-year mortgage rate increased for the fourth consecutive week to 4.04%. Peoples Home Equity highlights this rising rate environment despite falling weekly home loan demand to prospective applicant. Lenders see the sheer lack of national inventory is causing both home prices and mortgage rates alike to increase. American’s should not just sit on the sidelines and wait for to see if home prices or mortgage rates falls. Instead they should realize that as the nation’s unemployment rate continues to trend along below 6% more American’s will be enabled to obtain a home loan. This is especially true for young first-time home buyers eager to stop paying rent.

Peoples Home Equity also reminds its prospects that the Federal Reserve is intentionally planning to raise interest rates in the near future as the economy strengthens. The Fed will raise interest rates when it feels the economy may be growing too fast, it’s a safety measure to keep up with inflation. Since the housing bust the Fed has held rates low to promote growth, now that the housing recovery is well under way and stock market indices are near all-time highs, the possibility of a rate hike is likely.

Peoples Home Equity would not be surprised if the average quoted 30-year rate increases again and again for the next consecutive weeks. The lender expects home sales to continue increasing into the late summer and rates will reflect this rising demand.

If in need of a mortgage, contact a Peoples Home Equity loan officer today at: 262-563-4026.

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Giorgio U Ferrero
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