File photo: “For Sale” sign
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Consumers don't appear to be too impressed with the recent decline in mortgage rates: Total mortgage applications increased just 0.9% from the previous week, according to the Mortgage Bankers Association's seasonally adjusted index.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) fell from 7.02% to 6.94%, and points for loans with a 20% down payment fell from 0.65 (including origination fees) to 0.61, the lowest level since March.
“Last week, the latest inflation data and [Federal Open Market Committee] “At the meeting,” said Mike Fratantoni, MBA's senior vice president and chief economist.
Refinance demand, which is typically sensitive to week-to-week interest rate fluctuations, fell 0.4% for the week but was up 30% compared to the same week a year ago. Interest rates are still slightly higher than a year ago.
Mortgage applications for home purchases increased 2% this week, down 12% from the same week a year ago. Home sales have slowed further recently due to fluctuating interest rates. The supply of homes for sale remains low and prices remain high.
“While purchase volume is still more than 10 percent below last year's pace, the MBA expects home sales to recover over the remainder of the year as more inventory comes onto the market,” Fratantoni added.
Mortgage rates rose slightly earlier this week but fell on Tuesday after retail sales data came in below expectations.
“Overall, the outlook is less rosy for U.S. consumers than it was a few months ago,” wrote Matthew Graham, chief operating officer at Mortgage News Daily.