Weekly Mortgage Demand Remains Flat Despite Lowest Rates Since April 2023

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Mortgage rates fell for the fourth consecutive week, hitting their lowest level since April 2023, but the impact on mortgage demand was minimal. Total mortgage application volume increased by just 0.5% 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 dropped to 6.44%, down from 6.50%. Points also decreased to 0.54 from 0.60 for loans with a 20% down payment. Despite this decline, the demand to refinance decreased by 0.1% from the previous week, although it was 85% higher than the same week last year. Most existing borrowers hold mortgages with rates below 6%, making refinancing less attractive unless substantial savings can be achieved.

Applications for home purchases rose by 1% for the week but were still 9% lower compared to the same week last year. Joel Kan, MBA’s vice president and deputy chief economist, noted that prospective homebuyers are showing patience, waiting for further rate decreases and a rise in for-sale inventory.

Mortgage rates have been stable at the start of this week, with no significant economic data expected to impact them until the monthly employment report is released next week.

UK’s Starmer and Germany’s Scholz Aim to Strengthen Ties in Post-Brexit Reset

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UK Prime Minister Keir Starmer and German Chancellor Olaf Scholz met in Berlin on Wednesday to discuss deepening bilateral relations as part of a broader post-Brexit reset. The leaders focused on key areas such as energy security, defense, climate change, and economic cooperation. Both countries emphasized the importance of a strong partnership for economic growth and addressed an action plan for illegal migration.

In a joint statement, the UK and Germany highlighted the need to elevate their bilateral relationship to a new level, reflecting their close partnership within Europe. Key priorities for the collaboration include industrial transformation, tackling illegal migration, enhancing people-to-people contacts, and advancing in education, infrastructure, technology, research, and innovation. A formal agreement is expected to be signed early next year.

Scholz described the UK and Germany as “special partners,” while Starmer emphasized the importance of building on their already strong relationship. Since taking office in July, Starmer has prioritized resetting the UK’s relationships with European countries. His visit to Berlin is part of a broader trip to Germany and France to engage with political and business leaders.

Starmer expressed a commitment to taking advantage of the “once in a generation opportunity” to redefine the UK’s relationship with Europe, addressing the challenges left by Brexit and previous government policies.

5 Things to Know Before the Stock Market Opens Wednesday

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  • Market Moves
    All three major indices finished slightly higher on Tuesday. The S&P 500 gained 0.16% to close at 5,625.80, while the Nasdaq Composite also rose 0.16% to end at 17,754.82. The Dow Jones Industrial Average increased 0.02%, finishing at 41,250.50, marking its second consecutive record close. Stay tuned for live market updates.
  • Nvidia’s Big Day
    Nvidia is in the spotlight as it prepares to report its quarterly results after the market closes. The stock is less than 10% from its all-time high and has seen significant volatility this year. Analysts project Nvidia will continue its impressive growth streak, with a forecasted revenue increase of 112% to $28.7 billion. Market watchers consider Nvidia the “most important stock” currently, given its impact on the broader market.
  • Private Equity Expansion
    The NFL has approved a measure allowing private equity firms to acquire up to a 10% stake in teams. Thirty-one of the 32 franchise owners supported this move, with Bengals owner Mike Brown voting against it. Firms including Ares Management, Sixth Street Partners, and Arctos Partners, along with a consortium known as “The Avengers,” which includes Dynasty Equity and Blackstone, are set to participate.
  • Home Price Records
    The S&P CoreLogic Case-Shiller U.S. National Home Price Index reached a new high on Tuesday. Home prices rose 5.4% year-over-year as of June, though this was a slight decrease from May’s 5.9% gain. The gap between home price growth and inflation remains wider than historical norms, with the National Index averaging 2.8% more than the Consumer Price Index.
  • Lego’s Resilience
    Lego reported a 13% increase in revenue for the first half of the year, totaling 31 billion Danish krone (approximately $4.65 billion). The company sees strength across various product lines, including Lego Icons and Lego Creator, and its partnership with Epic Games’ Fortnite. Lego’s volume growth has rebounded, reversing last year’s trend of consumers opting for lower-priced sets.