Panic Buying

Applications for new mortgages dropped in the past week even though they really should have gone up. The American consumer is acting irrationally when it comes to buying or refinancing a home. When rates go up, demand for mortgages should drop. Conversely, when rates go down, demand for mortgages should increase. The opposite seems to be happening though.

“Applications for U.S. home mortgages decreased last week, as purchasing and refinancing activity fell despite lower interest rates on loans, an industry group said on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity decreased 1.6 percent 672.6 in the week ended April 15, slightly offsetting an increase of 6.1 percent the previous week.”