Annamaria Andriotis reported last week at The Wall Street Journal Online that, “Demand for mortgages fell substantially during the last three months of 2016 after rates spiked by more than half a percentage point in the wake of Donald Trump’s election. Total mortgage applications dropped 21% from the third quarter, led by demand for refinances which fell 31%, according to Mortgage Bankers Association data.
“The numbers were up slightly when compared with the same period a year earlier, but not enough for mortgage lenders to close the year on an optimistic note.”
Graph from The Wall Street Journal.
The Journal article noted that, “Average rates on 30-year fixed mortgages ended the quarter 0.82 of a percentage point higher than the end of September, according to MortgageNewsDaily.com. The increase began before the election and accelerated afterward as yields on benchmark U.S. government debt rose.”
Last week’s article added that, “On a broader level, the spike in mortgage rates left many lenders scrambling in the fourth quarter to figure out how to keep loan volume going as consumers have become accustomed to seeing rates below 4%. The latest MBA estimates show refinances are expected to fall to $479 billion in 2017, down 47% from last year.”
