Mortgage activity remains flat

1/30/2014 12:11:38 PM

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In the latest Mortgage Bankers Association weekly mortgage application survey, activity appeared to be stable during the week ending Jan. 24. When compared to the previous week, mortgage applications were virtually unchanged, dropping just 0.2 percent.

Mortgage refinance activity declined 2 percent during the week, while the purchase index rose 2 percent. The decline in refinance applications brought the total market share to 62 percent of all mortgage applications, down from the previous week's share of 64 percent.

Mortgage rates have risen more than 1 percent from a year ago, causing many to think harder about refinancing. Last week, rates hit an average of 4.52 percent for a 30-year fixed-rate home loan, the lowest rate since the end of November. Fortunately, mortgages have remained relatively affordable for most Americans, but have also given rise to popularity with adjustable-rate mortgages. According to the MBA weekly survey, ARMs account for 7 percent of the share of mortgage applications.

Interest rates for FHA mortgages were lower than conforming and jumbo loans, dipping to an average of 4.18 percent for a 30-year fixed-rate mortgage. Mortgage rates have recently reached their lowest levels since the Federal Reserve announced it would begin to taper stimulus spending. Since quantitative easing was enacted in 2012, mortgage rates have been kept artificially low, encouraging more Americans to become homeowners.

 Mortgage rates immediately inched up after the Federal Reserve announced its plan in December, before falling back to their end-of-year averages. Higher mortgage rates could make it more difficult for borrowers to afford home loans. As a result, adjustable-rate mortgages - which allow a borrower to start off the loan terms with a low rate for a certain number of years - will likely become more popular among homeowners.

Contact the Federal Savings Bank, a veteran owned bank, to find out more about affordable mortgage options.