Driven by a steep drop in refinance activity, the number of filings for home mortgages skidded to their lowest level in 13 years last week. This, despite the fact that interest rates are hovering near all time lows.
“Although rates remained essentially flat, refinance applications dropped this past week for the first time in a month,” said MBA vice president of research and economics Michael Fratantoni, in a statement… “Purchase applications are now 35% below their level of four weeks ago, as homebuyers have not yet returned to the market following the expiration of the homebuyer tax credit at the end of April,” Fratantoni said.
This could be a sign that the housing market is struggling to get back on its feet after the home buyer tax credit expired. However, NAR research shows that 27% of home purchases are cash-only deals, casting some suspicion on mortgage applications as a reliable indicator of the market’s health.