Mortgage demand fell last week even as rates fell slightly
A For Sale sign is displayed in front of a property in Monterey Park, California on August 16, 2022.
Frederic J. Brown | AFP | Getty Images
Mortgage rates fell slightly last week, but not enough to fuel any recovery in consumer demand for home loans.
Total mortgage application volume fell 2% from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Demand is at its lowest level since 2000. It hit a similar low in July.
Mortgage applications to buy a home fell 1% for the week and were 18% lower than the same week a year ago. Prospective buyers are not only grappling with higher interest rates, but also with inflation in the overall economy and the fear that home values are starting to fall.
The average contractual interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) decreased to 5.45% last week from 5.47% the previous week, the points going from 0.80 to 0.57 (including origination fees) for loans. with a 20% deposit. The rate was just over 3% a year ago.
Although mortgage rates have fallen slightly from their recent highs, few borrowers can benefit from refinancing. These requests fell 5% for the week and were 82% lower than the same week a year ago.
Mortgage rates haven’t moved much to start this week, but new economic data due on Wednesday could change that. The Federal Reserve is expected to release minutes from its last meeting, offering more insight into its thinking, but investors are likely most interested in the monthly retail sales report, also scheduled to be released on Wednesday.
“This report alone wouldn’t be enough to change the narrative, but if it’s significantly stronger or weaker than expected, rates could be on the move well before the Fed minutes are released at 2 p.m. ET,” Matthew said. Graham, COO. from Mortgage News Daily.