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.