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Mortgage rates fell last week, sending homebuyers jumping. According to the Mortgage Bankers Association’s seasonally adjusted index, these effects caused overall demand for mortgages to increase 6.3% from the previous week.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreases from 6.90% to 6.86%, and for loans with 20% down payment, points including origination fee remain unchanged at 0.70. There wasn’t. .
Although the drop in interest rates was not large, there was a significant amount of pent-up demand among homebuyers. Some will wait until after the election, others will seek lower interest rates, and others will seek increased supply. That’s all done.
The number of applications for mortgage loans for home purchases increased by 12% from the previous week, and by 52% from the same week last year. Mortgage interest rates were high at this time last year, but have been on the decline. However, the supply of homes for sale was extremely tight. This year it has improved markedly.
“Increasing inventory for sale and signs that the economy remains strong has kept buyers in the market despite recent increases in interest rates. An increase in traditional purchase offers has pushed the average purchase loan amount to 439,200, the highest level of 2019 in almost a month,” MBA Economist Joel Kang said in the release.
The number of mortgage refinance applications fell 3% for the week, but rose 119% compared to the same week last year.
However, these yearly comparisons are problematic.
“The decline in refinance activity was due to a rebound in FHA and VA refinances. Applications were significantly higher than a year ago by most measures, but this was due to the 2023 Thanksgiving, which was one week earlier than this year’s holiday. “This is compared to the week of the festival,” Kang pointed out.
Mortgage rates started the week slightly lower, but could move more significantly after Wednesday’s economic data release. Holiday weeks tend to be volatile for the market in general, and the bond market in particular.
“The unique market conditions created by the significantly shortened trading week will result in random trades in either direction during Thanksgiving week,” said Matthew Graham, Chief Operating Officer of Mortgage News Daily. There is a possibility.”
