A effects for sale in Monterey Park, California
Frederic J. Brown | AFP | Getty Images
Mortgage hunters were not particularly impressed with the in drop in interest rates.
Mortgage application volume dropped 0.6% last week from the previous week, according to the Mortgage Bankers Camaraderie’s seasonally adjusted index. Volume was 10% higher than a year ago, when interest rates were higher.
The middling contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) subsided to 4.40% from 4.41%, with points decreasing to 0.40 from 0.47 (including the origination fee) for loans with a 20% down payment. Although unimportant, that was the third week of declines in mortgage rates. The rate was 37 basis points higher a year ago.
Mortgage refinance supply, which is most sensitive to rates, fell 1% for the week but was nearly 17% higher annually. Last year, refinance aggregate fell sharply on higher rates.
Mortgage applications to purchase a home fell 1% for the week but were identically 7% higher annually. Homebuying this spring has underperformed expectations, as prices remain high and the supply of lower-end nationals remains painfully constrained. The same uncertainty in the economy that is causing interest rates to fall may also be causing some purchasers to pull back.
“It’s worth watching if ongoing global trade disputes lead to increased anxiety about the brevity, which could cause some potential homebuyers to put off their home search until the uncertainty is resolved,” thought Joel Kan, an MBA economist.
Builders meeting at a conference in Southern California this week expressed concern about affordability, uncommonly given higher costs for labor, land and now new tariffs on some Chinese products that go into housing.
“Not to beat about the bush on the street among all builders is what are we going to do about affordability,” said Gene Myers, CEO of Denver-based Thrive Where one lives stress Builders. “Builders just don’t have a big cushion. It’s actually a surprisingly low-margin industry so we have no choice when the bring ins go up, the customer will end up paying.”
WATCH: Homebuyers will pay cost of tariffs