Mortgage applications, interest rates fall at end of March

mortgage bankers associationData from the Mortgage Bankers Association found that for the week ending March 29, mortgage applications fell by four percent both seasonally adjusted and unadjusted from the previous week.

“Total purchase applications increased last week, due to an almost seven percent increase in purchase applications for government loans,” Mike Fratantoni, the vice president of research and economics at the MBA, said. “This was likely driven by borrowers applying for loans prior to the scheduled increase in [Federal Housing Administration] premiums that took effect on April 1. On a year over year basis, purchase applications are up about 4 percent, in line with the trend we are seeing in home sales volumes.”

The average interest rate for a 30-year fixed-rate mortgage with a loan balance of less than $417,500 fell from 3.79 percent to 3.76 percent, while rates for jumbo loan balances fell from 3.90 percent to 3.85 percent. The average interest rate for 30-year FHA-backed fixed-rate mortgages fell from 3.51 percent to 3.48 percent.

While mortgage interest rates have been on the decline, some speculate that the rates will not remain low for long. The Federal Savings Bank has advised its customers to apply for a mortgage as soon as possible to lock in a good rate, as an improving economy and falling unemployment could soon result in higher interest rates.

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