Mortgage Activity Drops Despite Low Interest Rates
Mortgage News from Quicken Loans
Long-term interest rates are still in the range of historic lows, but consumers looking to apply for a mortgage remained on the sidelines last week, according to a report today from the Mortgage Bankers Association (MBA). A survey conducted by the MBA of weekly mortgage activity among consumers showed that for the week ending May 25, the number of Americans applying for a mortgage to purchase a home or refinance their current mortgage fell 7.3 percent, as compared to the week that preceded it.
The survey also revealed that the Purchase Index, which tracks the number of people applying for a mortgage to buy a home, decreased 2.5 percent while the Refinance Index, which shows how many people are applying to refinance their current mortgage, dropped 13 percent from the previous week. Overall however, mortgage activity is occurring at a far more brisk pace than a year ago, with total applications up 17 percent compared to the same week in 2006.
Bob Walters, chief economist of Quicken Loans, says that although there will be some bumps in the road along the way, he expects to see a strengthening trend of consumers looking to refinance or purchase a home as we continue into summer.
"Today's purchase and refinance results come as a surprise, especially when paired with the fact that long-term interest rates remain near historic lows. However, there is a light at the end of the tunnel thanks to low long-term interest rates offering both homebuyers and those looking to refinance, very attractive financing options throughout the spring and summer," says Walters.
This article is reprinted by permission from Quicken Loans © 2007 Quicken Loans Inc. All rights reserved.
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