Freddie Mac reported a few weeks ago that 30-year fixed-rate mortgages fell to their lowest point in 2014. Even with these (surprisingly) low mortgage interest rates, the Mortgage Bankers Association (MBA) reported last week that purchase mortgage applications were at a six month low. They also reported that while purchase mortgage applications were nominally up (1.4%) from the previous week, total applications (including refinance) for government mortgages declined by 5.9% with VA applications falling 8% and FHA applications down 5%.
The future for mortgage applications? Here is how Freddie Mac summarized it in mid-August in their U.S. Housing & Economic Outlook: “Though we expect purchase origination volume to increase it will not offset declining refinance volume. We expect originations in 2014 to decline by about 40% relative to 2013, and decline by another 9% in 2015”.