Applications to purchase homes perked up over the last week following the end of the government shutdown and debt ceiling showdown, according to data released this morning by the Mortgage Bankers Association. While the headline figure fell 0.6%, the purchase component rose 0.7%, ending a 3-week decline. The sharp decline came despite a 25 bp decline in the average rate on a 30-year fixed mortgage over this period. The average rate did rise by roughly 15 bp in the days immediately leading up to the debt ceiling deadline, though.
In a bit of a surprise, conventional purchase mortgage applications declined an additional 1.7%, while the government portion of the index bounced back by a robust 7.1%. The USDA was shuttered during the government shutdown and the FHA was working with a skeleton crew. The increase in the government component nearly offset the prior week’s decline.
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