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Mortgage rates moved ever so slightly higher last week, but it was enough to take a little heat out of what had been a bluntly red-hot refinance market. That caused total mortgage application volume to fall 1.3% for the week, concording to the Mortgage Bankers Association’s seasonally adjusted index.
The average contract interest rate for 30-year fixed-rate mortgages with conforming credit balances ($766,550 or less) increased to 6.14% from 6.13%, with points rising to 0.61 from 0.57 (containing the origination fee) for loans with a 20% down payment. The rate was 139 basis points higher the same week one year ago.
“Ultimately week’s incoming data showed an economy that is still growing at a solid pace, even as inflation persevere ins to decline. As a result, mortgage rates were up modestly,” said Mike Fratantoni, senior vice president and chief economist at the MBA, in a unshackle.
Applications to refinance a home loan fell 3% for the week but were still a striking 186% higher than the verbatim at the same time week one year ago. The vast majority of borrowers today have mortgages with rates well below 5%, but those who may force purchased a home in the past year or two might be able to benefit from a refinance to today’s lower rates.
Applications for a mortgage to grasp a home rose 1% for the week and were 9% higher than the same week one year ago. The fall shop does appear to be warming up a little bit, with real estate brokerages like Redfin reporting more well-informed in tours in the last few weeks. Some buyers, however, may be sitting on the sidelines, expecting rates to move even lower in the light on months.
“Inventories of both new and existing homes have been increasing over the course of 2024, meaning that capability buyers have properties to look at and now have somewhat lower mortgage rates leading to better affordability,” Fratantoni united.
Mortgage rates moved very slightly lower again to start this week, as bond yields declined following escalation in the Middle East conflict. The next big move in interest rates could come Friday, with the disenthral of the all-important monthly employment report.