The urge to buy a home has softened now that mortgage rates have increased from the generational lows seen in May. But home demand hasn’t tumbled into the basement.
The Mortgage Bankers Association reported Wednesday that applications to purchase a home slipped slightly in the week ended October 4, but the smoothed four-week moving average edged higher. Applications are not as strong as back in the spring, but they haven’t collapsed either.
One reason is that mortgage rates are falling again. Market expectations that the Federal Reserve would slow its bond-buying program in September had pushed bond yields higher. When the Fed did not taper, rates fell back.
The 30-year fixed mortgage rate is back below 4.5%.
What remains to be seen is how the government shutdown slows the mortgage approval process in coming weeks. Delays could weaken home sales in the fourth quarter.
The Mortgage Bankers Association reported Wednesday that applications to purchase a home slipped slightly in the week ended October 4, but the smoothed four-week moving average edged higher. Applications are not as strong as back in the spring, but they haven’t collapsed either.
One reason is that mortgage rates are falling again. Market expectations that the Federal Reserve would slow its bond-buying program in September had pushed bond yields higher. When the Fed did not taper, rates fell back.
The 30-year fixed mortgage rate is back below 4.5%.
What remains to be seen is how the government shutdown slows the mortgage approval process in coming weeks. Delays could weaken home sales in the fourth quarter.
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