Prospective homebuyers are responding to lower mortgage rates and an increased supply of homes for sale. This led to increased demand for mortgages last week, as consumers looking to refinance pulled back.
Total mortgage application volume rose 2.8% from the previous week, according to the Mortgage Bankers Association's seasonally adjusted index. An additional adjustment has been made for the Thanksgiving holiday.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) fell to 6.69% from 6.86%, with points falling to 0.67 from 0.70 (including origination fees) for lower-interest loans. By 20%. Premium. This is the lowest rate in more than a month.
Mortgage applications to purchase a home jumped 6% during the week, the highest level since January. Orders were 21% lower than the same week one year ago, but there may be some noise in the year-over-year comparison since Thanksgiving fell on a different week this year than last.
“The recent strength in buying activity continues, supported by lower prices and higher inventory levels, giving potential buyers more options compared to the previous period of the year,” Joel Kahn, an MBA economist, said in a statement.
Home loan refinancing applications fell 1% during the week and were 7% lower than a year ago. Most borrowers today obtain loans at interest rates much lower than what is offered today.
“Conventional refinancing applications are down despite lower interest rates, but FHA and VA refinancings have rebounded from a week ago,” Kahn added.
Mortgage rates continued to decline to start this week, but there was nothing dramatic. Investors were weighing geopolitical headlines in France and South Korea against some positive comments about the economy from various Federal Reserve spokesmen on Tuesday afternoon.
Wednesday is set to see more market-moving economic data with the release of the ADP employment report and the ISM services index. Federal Reserve Chairman Jerome Powell will also appear in a moderated discussion at the New York Times DealBook Summit.