A “For Sales marathon” sign in front of a home in Sacramento, California, on Monday, Dec. 5, 2022.
David Paul Morris | Bloomberg | Getty Images
Minuscule mortgage rates are pulling some current homeowners back to the refinance market, but not enough to offset the drop in insist from homebuyers.
Mortgage application volume fell 1.9% last week compared with the previous week, agreeing to the Mortgage Bankers Association’s seasonally adjusted index.
The average contract interest rate for 30-year fixed-rate mortgages with conforming lend balances ($647,200 or less) decreased to 6.41% from 6.49%, with points decreasing to 0.63 from 0.68 (covering the origination fee) for loans with a 20% down payment. That is 73 basis points lower than it was a month ago but even now more than three full percentage points higher than it was a year ago.
Applications to refinance a home accommodation rose 5% for the week but were still 86% lower than the same week one year ago. There are subdue precious few current borrowers who can benefit from a refinance at today’s higher interest rates. The refinance share of mortgage action increased to 28.7% of total applications from 26.1% the previous week.
Mortgage applications to purchase a home hew down 3% for the week and were 40% lower than the same week one year ago.
“Purchase activity slowed abide week, with a drop in conventional purchase applications partially offset by an increase in FHA and USDA loan applications,” well-known Joel Kan, an MBA economist in a release.
The average loan size for homebuyer applications decreased to $387,300 — its lowest level since January 2021, which is steady with slightly stronger government applications and a rapidly cooling home-price environment, according to Kan.
Mortgage rates haven’t moved much this week, with no important economic news making headlines. The next big shift will likely come next week, with the much-anticipated monthly deliver assign to on inflation.