As properties fly off the market and prices continue to increase, buyers are reconsidering whether now is the time to find their dream home.
An index tracking applications for mortgages to purchase homes decreased 3.7 percent, seasonally adjusted, from the previous week, according to the Mortgage Bankers Association. This is the third week that the number of applications has fallen.
“The third straight week of declining purchase activity is a sign that rising home prices and tight supply is constraining home sales — especially in the lower price tiers,” Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a statement.
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Refinancings were also down, with the number initiated decreasing 5 percent, seasonally adjusted, from the previous week. Refinancing rates have increased from 2.92 percent to 3.27 percent over the past 10 weeks, which may be driving activity down.
The refinance share of mortgage activity makes up 59.2 percent of total applications, down from 60.3 percent the previous week. The average refinancing loan was $269,800, down from last week’s $272,100.
“Many borrowers have either already refinanced at lower rates or are unwilling — or unable — to refinance at current rates,” Kan said.
The average purchase loan was $399,000, which is only slightly below last week’s $399,500.
The average contract interest rate for 30-year fixed-rate mortgages decreased to 3.27 percent from 3.36 percent. Jumbo loans similarly decreased to 3.35 percent from 3.41 percent.
MBA’s survey covers 75 percent of the residential mortgage market and has been conducted weekly since 1990.