An aerial view of subdivisions that have replaced former rural fields in Hawthorn Woods, Illinois, on July 19, 2023.
Scott Olson | Getty Images
After a weaker-than-expected spring housing market, things aren’t looking any better in the summer: Home prices continue to climb, mortgage rates remain stuck at recent highs, and consumers are unimpressed with the modest increase in home listings.
All of this is reflected in weekly mortgage demand, which has been stagnant for a second straight week. Total mortgage applications were roughly flat last week, up just 0.8% from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
Mortgage rates also didn’t change much. The average contract rate for a 30-year fixed-rate mortgage on conforming loan balances ($766,550 or less) fell from 6.94% to 6.93%, and the points for a 20% down payment loan remained unchanged at 0.61 (including fees). However, this is the lowest rate in more than three months.
Mortgage refinance applications were unchanged week over week but up 26% compared to the same week a year ago.
“But low rates haven’t been enough to lure borrowers back to refinance, as most borrowers continue to have mortgages at significantly lower interest rates,” MBA economist Joel Kann said in a statement.
Mortgage applications for home purchases increased 1% this week but are down 13% from the same week a year ago. Total home supply is up 18% from a year ago, according to Zillow, but it remains a very tight market.
“Purchase applications did indeed increase slightly after the Juneteenth adjustment. Government purchase loans, primarily FHA and VA, increased more than 2% from the previous week as homebuyers in these segments sought to take advantage of recent interest rate relief,” Kang added.
Mortgage rates have been holding steady since the start of the week and are likely to remain so until Friday, when two important reports on consumer spending and personal consumption expenditures prices are released. Hints about the state of inflation tend to influence bond yields and, in turn, mortgage rates.
