Photo file: “For Sale” sign
Brandon Bell | beautiful images
Consumers seem unimpressed with the latest drop in mortgage rates. Total mortgage application volume increased just 0.9% 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 to 6.94% from 7.02%, with points decreasing to 0.61 from 0.65 (including origination fee) for loans with 20% down payment. That was the lowest level since March.
“Mortgage rates fell last week following the latest inflation data and the FOMC meeting,” said Mike Fratantoni, MBA’s SVP and chief economist.
Despite the decline, refinancing demand, which is often sensitive to weekly interest rate movements, fell 0.4% for the week but was 30% higher than the same week a year ago. Rates are still slightly higher than a year ago.
Mortgage applications to buy a home were up 2% for the week and were 12% lower than the same week a year ago. Home sales have even slowed recently amid volatile interest rates. The supply of homes for sale is both expensive and scarce.
“Buying volumes are still 10% slower than last year’s pace, but MBA forecasts home sales will increase for the rest of the year as more inventory comes to market,” Fratantoni added. .
Mortgage rates edged slightly higher earlier this week but then eased again on Tuesday after weaker-than-expected retail sales data.
“Overall, it painted a less optimistic picture for American consumers than it did a few months ago,” Matthew Graham, chief executive of Mortgage News Daily, wrote.
