Mortgage Aapplications fell last week in anticipation of the Holidays

By Patrick Doty, Editor, Bellevue Home Team Blog

Bellevue, WA

The number of people applying for a mortgage fell last week as higher rates and the holidays slowed borrowing.

The Mortgage Bankers Association said Wednesday its overall mortgage application index decreased 18.6 percent from the previous week. The refinance index dropped 24.6 percent, marking the sixth decline in a row. The purchase index slipped 2.5 percent last week. These figures do not take into account the normal seasonal dips that occur.  In the Bellevue area as well as throughout most of the nation our mortgage applications slow during the winter and especially during the holiday periods and typically pick up mid to late January.  As most of us move towards spring and hopes of warmer weather, home buyers are applying for mortgages and start looking for home with their Realtor.  Moving through the holidays most sellers are painting, cleaning, repairing and remodeling in order to get their homes on the market

Rates on fixed mortgages continued to edge up last week, remaining at the highest levels in six months causing more potential homebuyers to start looking for homes and to see what they might qualify for. The survey said the rate on a 30-year fixed mortgages rose to 4.85 percent from 4.84 percent. The rate on a 15-year loan, a common refinance option, inched up to 4.22 percent from 4.21 percent.
Mortgage rates are rising because Treasury yields have been increasing on rosier economic data and expectations that tax cuts will spur growth.  The higher rates are causing more home buyers to accelerate their home searches now in anticipation of even higher rates.

Rates had been hitting decade lows almost every week since spring as investors, worried about the economy, sought less risky Treasury bonds. As the economy improves, investors feel more confident about putting money in riskier investments like stocks.
In related news, more people bought previously occupied homes in November, the third gain in four months following a this past summer, the National Association of Realtors said Wednesday. Sales increased 5.6 percent from the month before to a seasonally adjusted annual rate of 4.68 million units.