Demand for mortgages is leveling off, even as interest rates reach their lowest level since March

Demand for mortgages is leveling off, even as interest rates reach their lowest level since March, File photos: “For Sale” sign.

Brandon Bell | Getty Images

Consumers seemed unimpressed by the latest drop in mortgage rates. Total mortgage applications rose just 0.9% from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.

The average contract rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased from 7.02% to 6.94%, with points decreasing from 0.65 to 0.61 (including the origination fee) for loans with a decrease of 20%. payment. That is the lowest level since March.

“Mortgage rates fell last week after the latest inflation data and the FOMC meeting,” said Mike Fratantoni, MBA’s SVP and chief economist.

Despite the decline, refinancing demand, which is typically sensitive to weekly interest rate movements, fell 0.4% this week but was 30% higher than the same week a year ago. Rates are still slightly higher than a year ago.

Mortgage applications for the purchase of a home rose by 2% this week and were 12% lower than in the same week a year ago. Home sales have become even slower lately due to volatile interest rates. The supply of homes for sale is as expensive as it is meager.

“Purchase volume is still more than 10 percent behind last year’s pace, but MBA predicts an increase in home sales for the remainder of the year as more inventory comes to market,” Fratantoni added.

Mortgage rates rose slightly this week but retreated on Tuesday after weaker-than-expected retail sales data.

“All told, it paints a less optimistic picture for the American consumer compared to a few months ago,” wrote Matthew Graham, chief operating officer at Mortgage News Daily.

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