Mortgage Rate Increases Correlate with Dip in Application Volume
Now is the time to buy. Rates and prices are going up. The Los Angeles real estate market might have seen limited activity in the second week of June, as mortgage rates jumped, leading to a decline in application volume.
Mortgage applications decreased 3.3 percent in the week ending June 14, according to the Mortgage Bankers Association. This was spurred by a 3 percent drop in the Refinance Index and a 3 percent decline in the Purchase Index.
One of the main reasons activity has slowed is the fact that mortgage rates have increased for the past six weeks. Both 15- and 30-year fixed-rate mortgages edged higher in the week ending June 13, according to Freddie Mac’s latest Primary Mortgage Market Survey.
Freddie Mac vice president and chief economist Frank Nothaft said rates jumped following May’s solid jobs report.
“Fixed mortgage rates crept up further this week following a solid employment report for May,” Nothaft said. “The economy added 175,000 new jobs and the number of discouraged workers fell by 780,000 to the fewest since September 2009.”
Another reason activity has been down is the limited amount of homes for sale, so as inventory is released, purchasing activity should pick up in Park Hills Heights.