Potential homebuyers are responding to lower mortgage rates and an increased supply of homes for sale. That boosted demand for mortgages last week as consumers looking to refinance pulled out.
Total mortgage application volume increased 2.8% from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Additional adjustments have been made for the Thanksgiving holiday.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased from 6.86% to 6.69%, and points for loans that declined 20% decreased from 0.70 to 0.67 (including origination fees). ). payment. This is the lowest interest rate in more than a month.
The number of applications for mortgages to buy homes rose 6% in the week, the highest level since January. The number of applications was down 21% compared to the same week last year, but this year’s Thanksgiving fell on a different week than last year, which may introduce some noise in the year-to-year comparison.
“Recent buying activity continues to be strong, supported by lower interest rates and higher inventory levels, giving prospective buyers more options than they had earlier this year,” MBA Economist Joel Kang said in a release. “There is,” he said.
Mortgage refinance applications fell by 1% for the week and 7% from a year ago. Today, most borrowers take out loans at much lower interest rates than are currently being offered.
“Traditional refinance applications declined despite lower interest rates, but FHA and VA refinances rebounded from a week ago,” Kang added.
Mortgage rates continued to fall this week, but the changes were not dramatic. Investors are weighing geopolitical headlines from France and South Korea against positive comments on the economy from various speakers at the Federal Reserve’s meeting on Tuesday afternoon.
Further market-moving economic data will be released on Wednesday with the release of the ADP jobs report and ISM services index. Federal Reserve Chairman Jerome Powell will also appear in a moderated discussion at the New York Times’ DealBook Summit.
