Mortgage demand declines further, even as interest rates drop a bit

Abstract

Mortgage demand edged lower for the fourth straight week, according to data released Wednesday, even though interest rates have fallen from their recent highs. Applications for a loan to purchase a home fell 1% for the week but were 18% lower than the same week one year ago. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances decreased to 5.74% from 5.82%, with points falling to 0.61 from 0.65 for loans with a 20% down payment. There could be "a potential silver lining" for the market, he added, as stabilizing mortgage rates and rising inventory "May bring some buyers back to the market during the second half of the year." Applications to refinance a home loan fell another 4% for the week and were 83% lower than the same week one year ago. The average rate on the 30-year fixed mortgage was 3.01% a year ago. Most borrowers have already refinanced to far lower rates than exist today. While mortgage rates do not follow the federal funds rate, they will respond to any commentary from Fed Chairman Jerome Powell after the meeting.