Demand for Home Loans
Plunges
Inside Mortgage Finance reports that home lending dipped to the lowest level in 14 years during the first three months of this year as borrowers stepped back from refinancing and house hunters showed little desire for new loans. The finding offers more proof that rising interest rates have had a negative impact on the U.S. housing recovery. From January through March, lenders originated $235 billion in mortgages -- a 58 percent decline from the same three months of 2013 and down 23 percent from 2013's fourth quarter. The 30-year fixed mortgage averaged 4.5 percent last week, an increase from 3.6 percent in May 2013. Interest rates have climbed in reaction to the Federal Reserve's stated desire to reduce a bond-buying campaign that was partly designed to keep a lid on long-term rates. The decline in first-quarter mortgage lending stemmed almost entirely from a drop in refinancing activity. Loans for home purchases were essentially flat on a year-over-year basis.
From "Demand for Home Loans Plunges"
Wall Street Journal (04/25/14) P. A1 Timiraos, Nick
Inside Mortgage Finance reports that home lending dipped to the lowest level in 14 years during the first three months of this year as borrowers stepped back from refinancing and house hunters showed little desire for new loans. The finding offers more proof that rising interest rates have had a negative impact on the U.S. housing recovery. From January through March, lenders originated $235 billion in mortgages -- a 58 percent decline from the same three months of 2013 and down 23 percent from 2013's fourth quarter. The 30-year fixed mortgage averaged 4.5 percent last week, an increase from 3.6 percent in May 2013. Interest rates have climbed in reaction to the Federal Reserve's stated desire to reduce a bond-buying campaign that was partly designed to keep a lid on long-term rates. The decline in first-quarter mortgage lending stemmed almost entirely from a drop in refinancing activity. Loans for home purchases were essentially flat on a year-over-year basis.
From "Demand for Home Loans Plunges"
Wall Street Journal (04/25/14) P. A1 Timiraos, Nick
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