Frustrated Buyers Applied for Fewer Mortgages Last Week

The Mortgage Bankers Association reports that mortgage application was down 2.5 percent last week, citing homebuyer pain points including high home prices and slim supply.

Mortgage applications to buy a home dropped 5 percent for the week, and up only 1 percent year-over-year, and total volume was down 12 percent YOY. Income growth is being outpaced nearly two-to-one by home price growth, and the fierceness of entry-level homebuyer competition is now a standard, rather than an anomaly, reports CNBC. Yet, Michael Fratantoni, chief economist at the MBA, says that there are more first-time buyers entering the market, " with FHA purchase volume increasing as conventional and VA volume decreased."

Mortgage rates have not moved much at all in the past month, which may be why refinance applicants are not doing much either. Applications did move 2 percent higher for the week but they were still 28 percent lower compared with the same week one year ago, when interest rates were lower. Refinance volume has been anemic for more than a year as so many homeowners refinanced several years ago when the average rate on the 30-year fixed was in the 3 percent range rather than the 4 percent range.

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