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Mortgage Demand Jumps as Interest Rates Hit 2014 Lows

Published by: Mike Goldman on 28th May 2014 | View all blogs by Mike Goldman
Mortgage Demand Jumps as Interest Rates Hit 2014 Lows

The Mortgage Bankers Association reported Thursday that demand for home loans rose 1.2 percent in the week ended May 23rd thanks to a surge in purchase applications.  According to the group's Weekly Mortgage Applications Survey, requests for purchase loans gained 1 percent, offsetting an identical 1 percent slide in applications for refinancing loans.  The boost in purchase loan demand came just as average mortgage rates reached their lowest levels this year.  

Mortgage insurer Freddie Mac reported last week that the average rate for a 30-year, fixed-rate home loan, the mortgage type most utilized in home purchases, fell to 4.13 percent.  Despite last week's gain in demand for home purchase loans, however, the MBA's mortgage purchase index is still down about 15 percent on a year-over-year basis.  The group's refinancing index, meanwhile, has plunged 73 percent from a year ago as interest rates have been rising steadily since the government began unwinding stimulus programs that were launched at the height of the recession. 



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