HomeBusinessMortgage demand falls even as rates fall

Mortgage demand falls even as rates fall

People wait to view a home for sale in Floral Park, Nassau County, New York.

Wang Ying | Xinhua News Agency | Getty Images

Mortgage rates fell for the second week in a row, but that did not revive demand from homeowners or potential buyers.

Rates fell 10 basis points last week and are down 24 basis points over the past two weeks, but total demand for mortgages fell 5.4% from a week ago, according to data from the Mortgage Bankers Association. This week’s results include a holiday adjustment to account for early closings on the Friday before Independence Day.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) fell to 5.74% from 5.84%, with points rising from 0 .64 to 0.65, including origination fees, for loans with a 20% decline. Payment.

“Mortgage rates fell for the second week in a row as growing concerns about an economic slowdown and rising recession risks kept Treasury yields lower,” said Joel Kan, associate vice president of forecasts. economic and industrial MBA.

Those concerns showed up in home loan refinance applications, which fell 8% for the week and 78% from the same week a year ago. The refinancing share of mortgage activity fell to 29.6% of total applications, from 30.3% the previous week.

Home buying inquiries were also down for the week and the year, down 4% and 17%, respectively.

“Rates are still significantly higher than they were a year ago, which is why home buying and refinancing applications remain depressed. accessibility and low inventory,” Kan said.

Realtor.com released its June housing report last week which showed a recovery in inventory for sale, climbing at its fastest annual pace ever, up 18.7% year-on-year. ‘other. However, there are still 53.2% fewer homes for sale compared to June 2019.

“Our June data shows that the inventory recovery has accelerated, posting the second consecutive month of active listing growth in nearly three years. We expect these improvements to continue,” said Danielle Hale, chief economist at Realtor.com, but she added, “The typical buyer has yet to see significant relief from the rapid sale of homes and record asking prices.”

According to the Mortgage Bankers Association, the average home purchase loan size is $405,200, down from $413,500 for the week ending June 24.

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