A “For Sale” sign is placed on the lawn in front of a home on March 15, 2024, in Miami, Florida.
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The housing market is typically experiencing a busy spring, but mortgage demand is not moving. Application volume was essentially flat last week, down 0.7% from the previous week, according to the Mortgage Bankers Association's seasonally adjusted index.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) fell to 6.93% from 6.97%, with points falling to 0.60 from 0.64 (including origination fees) for low-interest loans. By 20%. Premium.
Home loan refinance applications fell 2% during the week and were 9% lower than the same week one year ago. Mortgage rates today are still about half a percentage point higher than they were this time last year, meaning new borrowers have no incentive to refinance. Anyone with a mortgage older than that will likely have a rate half of what is currently offered.
Mortgage applications to purchase a home fell 0.2% from the previous week and were 16% lower year over year.
“Purchase demand is essentially unchanged, as homebuyers continue to cling to low mortgage rates and more listings hit the market,” Joel Kahn, an MBA economist, said in a news release. “Low interest rates should help free up additional inventory as the lock-in effect declines, but we expect this to happen only gradually, as we expect interest rates to move toward 6 percent by the end of the year.”
Mortgage rates have moved sideways to start this week and are unlikely to change until next week, when more economic data is released.
“Interest rates are driven by bonds, and bonds are waiting for the most relevant economic data to provide commentary on the path of inflation and the economy overall,” wrote Matthew Graham, chief operating officer at Mortgage News Daily. “If inflation falls a little more or if the economy shows clear signs of weakness, that would tip the scales in favor of lower interest rates.”
