Mortgage demand rises as interest rates drop slightly

Mortgage applications rose 2.2% last week from the previous week, driven by a slight decline in interest rates, according to the Mortgage Bankers Association’s seasonally adjusted index.

Refinancing applications, which are usually the most sensitive to weekly price movements, were up 2% for the week but still 86% lower than the same week a year ago. Even with interest rates now back from their recent highs of 7.16% a month ago, there are still a precious few who could benefit from refinancing – just 220,000, according to real estate data firm Black Knight.

Mortgage applications for a home were up 3% for the week, but were down 41% from a year ago. Some potential buyers may now venture again, as they’ve heard there is less competition and more bargaining power, but there is still a shortage of homes for sale and prices haven’t fallen significantly.

Rates are still double what they were at the start of the year, but are down from where they were last week. The average contract interest rate for 30-year fixed-rate mortgages with matching loan balances ($647,200 or less) fell to 6.67% from 6.90%, with the score increasing to 0.68 from 0.56 (including origination fees) for loans of 20%. low pay.

“The decline in mortgage rates should improve the purchasing power of potential homebuyers, who have been largely sidelined as mortgage rates more than doubled in the past year,” Joel Kahn, MBA economist, said in a statement. With ARM stock rates falling [adjustable-rate] The number of applications also fell to 8.8% of loans last week, down from a range of 10% and 12% over the past two months.

Mortgage rates haven’t moved at all this week, as the upcoming Thanksgiving holiday tends to weigh on volumes.

“It’s not that things aren’t moving. They’re not moving as usual,” said Matthew Graham, chief operating officer of Mortgage News Daily. “We expect things to return closer to normal next week, but for the market to continue to wait until December 13th and 14th for the biggest moves.”

That’s when the government releases its next major report on inflation and the Federal Reserve announces its next move on interest rates.