Daily Economic Update: Mortgage Purchase Applications

Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update highlights mortgage purchase applications.

• Mortgage applications continued their slide during the week ending September 2, decreasing 5.3 percent.
• Mortgages for home purchases were down 2.1 percent, while refinancings declined 6.3 percent.
• Interest rates on 30-year fixed mortgages also continued to decline from 4.32 to 4.23 percent.
• Consumers remain wary of the housing markets, despite historically low interest rates.
• The Federal Reserve is considering additional stimulus actions to boost the economy, such as selling short-term securities to purchase long-term bonds.  While the move is aimed at lowering long-term interest rates, given consumers' reluctance to engage in the loan market, it is not likely to work.  What will matter is returning underwriting standards to normal from their current overly-stringent conditions, rather than small changes in mortgage rates.
• Note that mortgage applications data misses out on all-cash home purchases, which make up about 30 percent of all sales.