Mortgage application volume barely budged last week, down 0.5% from the previous week, according to the National Mortgage Association’s seasonally adjusted index.
Interest rates, meanwhile, fell slightly last week but are still near 22-year highs.
The average contract rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) decreased from 7.16% to 7.06%, with points increasing from 0.88 to 0.73 (including origination fees) for loans with a decrease of 20%. Payment. This rate was 3.24% in the same week a year ago.
That small drop was enough to move the needle a little bit on the refinancing request. Those requests were up 0.2% for the week, but were still 85% lower than a year ago. There are now very few qualified borrowers who do not already have a lower interest rate than what is offered today.
Applications for mortgages to buy a house fell 1% for the week and fell 41% year-on-year. Real estate agents and home builders say buyer traffic has slowed. Agents say buyers today see no sense of urgency, and some may be waiting for prices to drop more significantly.
“In addition to the ARM loan rate, rates for all other types of loans were more than three percentage points higher than they were a year ago. These high rates continue to put pressure on purchase and refinance activity and have exacerbated affordability issues affecting the broader housing market, which is evident from the worsening trends in home starts and home sales,” says Joel Kan, an economist with an MBA.
Mortgage rates have started to rise again this week, according to Mortgage News Daily, but all ears are now on Wednesday’s Federal Reserve meeting. With the Fed expected to raise its key interest rate by 0.75 percentage points, investors are more focused on what it will signal for future interest rate movements. Some believe the Fed is ending or at least slowing its rate hikes.
“If they go as far as throwing this bone in the market, it would likely be good for early pricing,” wrote Matthew Graham, COO of Mortgage News Daily. “If they completely refrain from it, the rates will get a bad one [Wednesday] afternoon. … Either way, volatility risk is high.”
