Mortgage rates fell for the fourth straight week last week, but current homeowners and home buyers didn’t seem particularly impressed.
Total mortgage applications rose just 0.5 percent last week from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
The average contract rate for 30-year fixed-rate mortgages on conforming loan balances ($766,550 or less) fell to 6.44% from 6.50%, and for loans with a 20% downpayment, points, including fees, fell from 0.60 to 0.54, the lowest rate since April 2023. Rates were down more than 80 basis points from a year ago.
Despite the decline, refinance demand was down 0.1% from the previous week, but still 85% higher than the same week a year ago. The problem is that the majority of borrowers are taking out mortgages with interest rates well below 6%, so refinancing is only worth the cost if you can shave at least 75 basis points off your current interest rate.
Mortgage applications for home purchases increased 1% this week but were down 9% compared to the same week a year ago.
“As we’ve observed in recent weeks, we haven’t seen much movement in purchase applications despite interest rates falling. As interest rates fall and for-sale inventory begins to increase, prospective homebuyers are remaining patient,” said Joel Kang, MBA vice president and deputy chief economist.
Mortgage rates have remained stable since the start of the week, with no significant economic data coming out to impact rates. The next big move could come with the monthly employment report due at the end of next week.
