Mortgage Markets Don’t Share in Trump Election Bounce

Mortgage lenders had a bumpy ride in the fourth quarter, Mortgage Bankers Association data show

Total mortgage applications dropped 21% in the fourth quarter from the third as demand for refinances fell 31%, according to the Mortgage Bankers Association. PHOTO: JOHN BAZEMORE/ASSOCIATED PRESS

By AnnaMariaAndriotis
Updated Jan. 11, 2017

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.

Reduced mortgage demand in the wake of higher rates will likely be a recurring theme in fourth-quarter bank earnings, which kick off Friday. Analysts expect lower mortgage-banking earnings fueled by a mix of lower volume and a decline in profit margins.

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