Loan Demand Softening This Month

Loan demand for home purchases and refinancings fell last week as mortgage rates edged up.

The Mortgage Bankers Association reports that its mortgage application index — which reflects both refinancings and loans for home purchases — dropped 1.8 percent for the week ending Nov. 8. That follows a revised drop of 2.8 percent in the previous week.

Refinancing applications dropped 2.3 percent last week, following a 3.9 percent decline in the Nov. 1 week.

Applications for home purchases fell slightly at 0.5 percent last week, following a 0.7 percent revised drop the previous week. Originally, the MBA had reported purchase applications had fallen 5.2 percent last week.

Renewed fears that the Federal Reserve will soon end its stimulus program are causing applications to fall, The Wall Street Journal reports. The Fed is purchasing $85 billion per month in bonds, which has helped keep mortgage rates low. The Fed has signaled that it may start to taper that program off this year.

The MBA reports the 30-year fixed-rate mortgage moved up 12 basis points to average 4.44 percent last week.

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