Mortgage rates fell for the fourth straight week last week, but neither current homeowners nor homebuyers seemed particularly impressed.
Total mortgage application volume rose just 0.5% last week from the previous week, according to the Mortgage Bankers Association's seasonally adjusted index.
The average contract interest rate on 30-year fixed-rate mortgages with conforming loan balances — $766,550 or less — fell to 6.44% from 6.50%, with points falling to 0.54 from 0.60, including origination fees, for loans with a 20% down payment. That was the lowest rate since April 2023. Rates are down more than 80 basis points from a year ago.
Despite the drop, demand for refinancing was down 0.1% from the previous week. However, demand was 85% higher than the same week a year ago. The problem is that the vast majority of borrowers have mortgages with interest rates well below 6%. Refinancing is only worth the cost if you can lower your current interest rate by at least 75 basis points.
Applications for a mortgage to buy a home rose 1% during the week, but were 9% lower than the same week a year ago.
“As we have seen in recent weeks, despite the decline in prices, demand has not moved much,” said Joel Kahn, vice president and deputy chief economist of the Home Buyers Association. “Prospective homebuyers are being patient now that prices have fallen and inventory is starting to pick up.”
Mortgage rates held steady at the start of the week, with no major economic data to weigh on them. The next big move could come with the monthly employment report later next week.
