Ahead of shutdown, mortgage activity drops slightly
Posted on Wednesday, October 2, 2013 at 10:30:12 AM
Over this past week, a lot has happened regarding the U.S. government shutdown and the housing market. Buyers using residential financing may have been keeping a close watch on all of the changes, and recent data indicated that the total volume of mortgages dipped.
For the week ending on Sept. 27, mortgage applications declined 0.4 percent from the previous week, according to the Mortgage Bankers Association. On an unadjusted basis, the Market Composite Index dropped 1 percent on a weekly basis.
On the contrary, residential financing has seen an uptick in the refinance segment of total applications, the MBA reported. This segment accounted for 63 percent of the total number of applications, the highest it has been since August, and 2 percentage points greater than last week.
However, the government shutdown may have an effect on mortgage activity, according to CNBC. The shuttering of non-essential government offices might restrict the current market even more than it already is.
One of the reasons as to why is because most lender now perform rigorous checks about each potential borrower. Now, with many government organizations closed, that could seriously slow down the process. Another result could be lower rates, though, depending on how investors react to current situations.