CHICAGO -- Friday, August 24
Mortgage applications continue to stay down, despite strong economic numbers and reasonable interest rates.
While the U.S. Federal Reserve eyes its continued policy of slowly increasing lending rates on the back of strong employment and consumer confidence data, housing rates continue to remain competitive for prospective buyers.
Despite the relative historical low in purchase rates, borrowers are hesitant to pull the trigger on a new home.
“It’s pretty much the same story it has been," Brian Surgener, SVP of Strategy at BBMC Mortgage, told Builder Magazine and the MReport.
"Though more people are employed today than they were last year we are not seeing them move up in home size or out of their rentals and into a new home,” Surgener said.
“Instead they are spending money on gadgets or updating their current homes. The summer is nearly over and kids are going back to school. As we roll into the end of the year real estate transactions start to slow down. Will we be able to see the wage growth we need in Q4 or will rates grind higher and make this a tough end to 2018 for the mortgage industry?”
Low inventory certainly doesn't help potential borrowers on the fence who do not want to or are not able to build a new home.
Will borrowers seize the competitive rates and increase the total purchase application numbers? Time will tell, and should tell us more very soon.
To read the rest of the MReport article, click here.