- The average contract rate on 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) fell to 6.48% from 6.50% last week.
- The number of applications for refinancing a home loan increased by 10% last week compared to the previous week.
- Mortgage applications to buy a home rose 5% this week but was down 32% from the same week a year ago.
A display for a realtor at Coldwell Banker Dynasty TC (left) is shown as she speaks to a potential homebuyer during an open house in Arcadia, California.
Jonathan Alcorn | Bloomberg | Getty Images
Mortgage rates fell slightly last week after the Federal Reserve chairman hinted at a possible end to a historic string of rate hikes. The decline wasn’t significant, but it was enough to spur demand from current homeowners looking to refinance their mortgages at lower interest rates.
The average contract rate on 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) fell to 6.48% last week from 6.50% the previous week, with points falling from 0.63 to 0.61 (including the processing fee ). Loans with a 20% down payment according to the Mortgage Bankers Association weekly survey. In the same week a year ago, the rate was 5.53%. Mortgage rates on all types of loans studied fell over the week.
As a result, home loan refinance applications rose a seasonally adjusted 10% last week from the previous week. However, funding demand was still 44% lower year-on-year.
“Mortgage applications reacted positively to a fall in interest rates last week as the Fed signaled a possible pause at current levels of the Federal Funds Rate in anticipation of a slowdown in inflation and tightening financial conditions that will slow economic and job growth,” it wrote Joel Kan, MBA Deputy Chief Economist, in a press release.
Mortgage applications to buy a home rose 5% this week but were down 32% from the same week last year. Interest rates haven’t really fallen enough to offset high house prices. Prices have been cooling since last summer but are already rising again this spring due to strong demand and very little supply.
Mortgage rates rose sharply earlier this week, according to a separate survey by Mortgage News Daily. The rise was driven by investor sentiment that the regional banking crisis may be abating. However, all bets are on Wednesday when the government releases the consumer price index, a monthly report on inflation. Any major deviation from expectations, in either direction, could have a significant impact on bond yields and, in turn, mortgage rates.