A For Sale sign is placed in front of a home for sale in San Marino, California on September 6, 2023.
Frederick J. Brown | AFP | Getty Images
Mortgage rates fell slightly last week, leading to a big jump in mortgage demand for the second week in a row. Total application volume rose 7.1% compared to 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 6.84% from 7.02%, with points falling to 0.65 from 0.67 (including origination fees) for low-interest loans. By 20%. Premium.
“Mortgage rates fell below 7% last week for most loan types due to incoming economic data showing a weaker services sector and a less robust labor market, with an increase in the unemployment rate and downward revisions to job growth in prior months,” Mike said. Fratantoni, senior vice president and chief economist at MBA.
As a result, home loan refinancing applications, which are most sensitive to weekly interest rate movements, rose 12% during the week and were 5% higher than the same week one year ago.
“Although these percentage increases are significant, the level of refinancing activity remains very low, and we expect most of this activity to reflect borrowers who obtained a loan at or near peak rates in the past two years,” Fratantoni added.
Mortgage applications to purchase a home rose 5% over the week but were still 11% lower than a year ago. Homebuyers face more than just high interest rates. They are looking at sky-high home prices and a weak supply of homes for sale. While more inventory comes to the market with the spring season, it is not enough to meet demand, especially for small and entry-level homes.
Mortgage rates rose slightly at the beginning of this week, after a government report on higher-than-expected consumer prices was released on Tuesday. However, the increase was smaller than previous reactions to similar economic data.
“This suggests that the market is starting to see more convincing signs that inflation and the economy have a better chance of delivering favorable interest rate news in the near future rather than news that would trigger a significant rebound,” said Matthew Graham, chief operating officer at the bank. Daily Mortgage News.
