3 Reasons Mortgage Demand Is Dropping
In a recent blog post, Freddie Mac analysts point to three main factors behind the decrease in mortgage originations:
- The refinancing boom has ended.
- Home sales are down.
- More buyers are paying cash.
"Mortgage rates were little changed following mixed housing news,” says Frank Nothaft, Freddie Mac’s chief economist. “Existing-home sales rose for the fourth consecutive month to an annualized pace of 5.15 million, the highest of the year. On the other hand, new-home sales fell for the third consecutive month to an annualized rate of 412,000 units.
Freddie Mac reports the following national averages with mortgage rates for the week ending Aug. 28:
- 30-year fixed-rate mortgages: averaged 4.10 percent, with an average 0.5 point, holding the same as last week’s new low for 2014. A year ago at this time, 30-year rates averaged 4.51 percent.
- 15-year fixed-rate mortgages: averaged 3.25 percent, with an average 0.6 point, rising from last week’s 3.23 percent average. Last year at this time, 15-year rates averaged 3.54 percent.
- 5-year hybrid adjustable-rate mortgages: averaged 2.97 percent, with an average 0.5 point, rising from last week’s 2.95 percent average. Last year at this time, 5-year ARMs averaged 3.24 percent.
- 1-year ARMs: averaged 2.39 percent, with an average 0.5 point, rising from last week’s 2.38 percent average. A year ago, 1-year ARMs averaged 2.64 percent.
Source: Freddie Mac
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