An aerial view shows a subdivision that has replaced a rural landscape on July 19, 2023 in Hawthorne Woods, Illinois.
Scott Olson | Getty Images
After a weaker-than-expected spring housing market, summer doesn't look any better. Home prices continue to rise, mortgage rates have not fallen from their recent highs, and consumers have not been affected by the uptick in home listings.
All of this is reflected in weekly mortgage demand, which remained stuck for the second week in a row. Total mortgage application volume was essentially flat last week, up just 0.8% from the previous week, according to the seasonally adjusted Mortgage Bankers Association index.
Mortgage rates haven't moved much either. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) fell to 6.93% from 6.94%, with points holding steady at 0.61 (including origination fee) for loans with a 20% down payment. %. But this is the lowest rate in more than three months.
Home loan refinance applications did not change from week to week but were 26% higher than the same week one year ago.
However, low interest rates have not been enough to entice borrowers to refinance again, as most continue to hold mortgages at much lower interest rates, MBA economist Joel Kahn said in a press release.
Home mortgage applications rose 1% during the week but were 13% lower than the same week one year ago. Total housing supply is up 18% from a year ago, according to Zillow, but it's still a very weak market.
“Purchase orders saw a slight increase after adjusting for the Juneteenth holiday. Government purchase loans, especially FHA and VA loans, saw gains of more than 2 percent over the previous week, as homebuyers in those sectors sought to take advantage of recent interest rate easing,” Kahn added.
Mortgage rates moved sideways to start this week and will likely remain that way until Friday when two important reports on consumer spending and PCE prices are released. Any indication of the current inflation situation tends to affect bond yields and therefore mortgage interest rates.
