Mortgage refinancing applications in decline in the United States
The Mortgage Bankers Association in the United States reported on Wednesday that mortgage applications fell by 4.2% for the second week in a row during the week that ended March 19, according to Examiner.com. The biggest decline came in refinancing applications, which dropped by 7.1%. The share of applicants who are refinancing rather than financing a home purchase dropped to 65%.
The average mortgage rate rose slightly to 5.01% for a 30-year fixed-rate loan. The average rate on 15-year fixed-rate mortgage loan rose to 4.33%.
Homeowners interested in refinancing have been facing stricter credit standards than a few years ago, but the bigger obstacle to refinancing remains home values. If their home has dropped in value, even homeowners who initially were not required to pay private mortgage insurance (PMI) may now need to pay for this insurance if the have less than 20% equity in the property.
As the homebuyer tax credit deadline approaches on April 30 (when homes must be under contract in order for the buyers to qualify for the credit), real estate experts anticipate a surge in mortgage applications.
The same source (Examiner.com) reports that there may be a drop in applications in the following months since demand for housing is expected to peak before the credit expires.
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