Archive photos: “For sale” sign
Brandon Bell |
Consumers seemed unfazed by the recent decline in mortgage rates. According to the Mortgage Bankers Association's seasonally adjusted index, the total volume of mortgage applications rose by just 0.9 percent compared to the previous week.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) fell from 7.02% to 6.94%, with points for loans with a 20% down payment falling from 0.65 to 0.61 (including origination fees), the lowest since March.
“Mortgage rates fell last week following the latest inflation data and the FOMC meeting,” said Mike Fratantoni, SVP and chief economist at MBA.
Despite the decline, demand for refinancing, which is usually sensitive to weekly interest rate fluctuations, 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 rose 2% this week, 12% lower than the same week a year ago. Home sales have slowed even more recently due to volatile interest rates. The supply of homes for sale is as expensive as it is tight.
“Buying volume is still more than 10 percent below last year's levels, but MBA forecasts a rebound in home sales for the rest of the year as more inventory comes onto the market,” Fratantoni added.
Mortgage rates rose slightly earlier this week but then fell on Tuesday after retail sales came in weaker than expected.
“Overall, the picture for the American consumer is less optimistic than it was a few months ago,” wrote Matthew Graham, chief operating officer at Mortgage News Daily.