Mortgage rates fell again last week, and while it wasn’t a huge drop, it was enough to prompt current homeowners to look for savings. The surge in refinances was driven by a 5.4% increase in total demand for mortgages 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) decreased from 6.69% to 6.67%, and points for loans that fell 20% decreased from 0.67 (including origination fees) to 0.66. . payment. This was the third consecutive week of decline.
Applications for mortgage refinance increased by 27% from the previous week and by 42% compared to the same week last year. The large percentage is probably because the base volume is still very small. Today, most borrowers take out mortgages at interest rates that are significantly lower than those currently being offered. From 2020 to the first half of 2022, interest rates were below 4%. Mortgage rates fell 40 basis points last week compared to the same week a year ago.
Refinances as a share of mortgage activity increased to 46.8% of total applications from 38.7% the previous week.
The number of applications for mortgages to buy homes fell by 4% for the week, and was up 4% from the same week last year. Demand from homebuyers has increased in recent weeks as more inventory hits the market.
“Purchase applications remain relatively strong, with annual increases in all but one week over the past three months.In addition to lower interest rates, purchase activity is driven by continued housing demand and continues to be supported by gradually increasing inventories in the market,” MBA economist Joel Kang wrote in the release.
Mortgage rates rose 10 basis points this week, according to a separate Mortgage News Daily survey. This erased much of last week’s decline. But Wednesday sees the release of the monthly consumer price index, a measure of inflation, so it could swing in either direction.
“Wednesday morning’s CPI data is the last big piece of the puzzle the Fed will receive before making its ‘to cut or not to cut’ decision next week,” said Matthew Graham, chief operating officer of Mortgage News Daily. There is no question that it is peace.” “Of course, the market knows this, so a large deviation from expectations would definitely be enough to move things.”
