A home, available for sale, is shown August 12, 2021 in Houston, Texas.
Brandon Bell | Getty Images
Mortgage applications rose 2.2% last week from the previous week, due to a slight decline in interest rates, according to the Mortgage Bankers Association’s seasonally adjusted index.
Refinance applications, which are typically the most sensitive to weekly rate movements, rose 2% for the week but were still 86% lower than the same week a year ago. Even with interest rates back from their recent high of 7.16% a month ago, few can still qualify for a refinance – just 220,000, according to real estate data firm Black Knight.
Mortgage applications to buy a home were up 3% for the week, but down 41% from a year ago. Some potential buyers may now venture out again, learning that there is less competition and more bargaining power, but there is still a shortage of homes for sale and prices have not come down significantly.
Rates are still double what they were at the start of the year, but eased somewhat last week. The average contractual interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) fell from 6.90% to 6.67%, with points rising from 0.56 at 0.68 (including origination fees) for loans with a 20% decline. Payment.
“Lower mortgage rates should improve the purchasing power of potential buyers, who have been largely sidelined as mortgage rates have more than doubled over the past year,” said MBA economist Joel Kan. , in a press release. “As rates fall, ARM stock [adjustable-rate] Applications also fell to 8.8% of loans last week, from 10% and 12% in the past two months. »
Mortgage rates haven’t budged at all this week as the upcoming Thanksgiving holiday tends to weigh on volumes.
“It’s not that things aren’t moving. They’re just not moving as usual,” said Matthew Graham, chief operating officer of Mortgage News Daily. “Expect things to get back closer to normal next week, but the market will continue to wait for December 13-14 for the biggest moves.”
That’s when the government releases its next major inflation report and the Federal Reserve announces its next interest rate decision.