Daniel Acker | Bloomberg | Getty Images
Home buyers seemed unchanged from the reverse interest rate last week or may have been in action.
The strong demand from buyers easily compensates for the decline in demand from those who wish to refinance.
The total volume of mortgage applications was equal for the week, which is slightly 0.1%, according to the seasonally adjusted index of the Mortgage Bankers Association. The volume is still 67% higher than the same week a year ago when interest rates are much higher.
The average rate on a 30-year fixed rate mortgage with corresponding loan balances ($ 484,350 or less) increased to 4.01
Home loan refinancing applications, which are highly sensitive to weekly interest rate movements, fell 4% in the week but were 148% higher annually. The total volume has been strong since July, when rates began to decline sharply and are therefore still up despite a one-week decline.
Home mortgage applications increased 6% in the week and were 15% higher annually, Buyers are returning to the market in the last few weeks, despite the low supply of homes for sale. Higher interest rates and overheated home prices last spring kept buyers back, so some of that demand could show up now.
The average amount of credit for purchase applications has risen to its highest since June, suggesting that most purchases are now at the higher end of the market.
Mortgage applications to buy a new home jumped 33% annually in August, according to a separate report released Tuesday by the MBA.
"New home buying activity was stable in August, as both mortgage applications and estimated home sales increased a year ago," says Joel Kahn, associate vice president of MBA in Economic and Industrial Forecasting. "The recent increases in new housing permits and housing start-ups, lower mortgage rates and the still strong employment market offer good results for new housing sales prospects."