- Last week the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 6.73% from 6.77%.
- Applications to refinance a home loan fell 2% for the week and were 40% lower than the same week one year ago.
- Mortgage applications to purchase a home increased 2% for the week but were 32% lower than the same week a year ago.
The average rate on the most popular mortgage, the 30-year fixed, fell for the third straight week, but demand for mortgages didn’t move much.
Total mortgage application volume increased 0.5% last week, compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. This after demand surged the week before.
Last week, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 6.73% from 6.77%, with points falling to 0.64 from 0.65 (including the origination fee) for loans with a 20% down payment.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $726,200) increased to 6.80% from 6.79% for loans with a 20% down payment. This marks the second straight week that jumbo loans have a higher rate than conforming loans.
“The last time jumbo rates were higher was in December 2021. Tighter liquidity conditions have prompted jumbo lenders to pull back, increasing rates in the process,” wrote Joel Kan, an MBA economist, in a release.
Applications to refinance a home loan decreased 2% for the week and were 40% lower than the same week one year ago.
Mortgage applications to purchase a home increased 2% for the week but were 32% lower than the same week a year ago. Homebuyers are starting to get used to higher interest rates, but the continued drop in new listings of homes for sale is keeping sales low. Federal Housing Administration demand rose more than conventional loan demand.
“First-time homebuyers account for a large share of FHA purchase loans, and this increase is a sign that while buyer interest is there, activity continues to be constrained by low levels of affordable inventory,” added Kan.
Homebuilders are benefiting from the dynamic. Mortgage applications to purchase a newly built home jumped 17% in May compared with May 2022, according to the MBA. In tandem with demand, single-family housing starts jumped 18.5% in May compared with April, according to the U.S. Census.
Mortgage rates began this week slightly lower, but that could change Wednesday as investors react to testimony from Federal Reserve Chairman Jerome Powell before the House Financial Services Committee.
Source: Business - cnbc.com
