U.S. mortgage rates fell to a seven-week low last week and refinancing demand recovers

Mortgage rates fell for a third consecutive week last week, sparking increased demand for refinancing. However, homebuyers are not impressed.

Mortgage rates fell for a third consecutive week last week, sparking increased demand for refinancing.
However, homebuyers are not impressed.
Total home loan applications rose 1.9% from the previous week, according to the Mortgage Bankers Association\’s (MBA) seasonally adjusted index.
The average contract interest rate for qualifying 30-year fixed-rate mortgages fell from 7.08% to 7.01%; loan scores with a 20% down payment fell from 0.63 to 0.60, including origination fees.
Home loan refinancing applications increased 7% this week compared with a 21% increase in the same week a year ago.
Rates were just 32 basis points higher last week than a year ago and the gap has been narrowing.
Interest rates for the vast majority of borrowers today are still well below current rates so demand remains at very low levels even with weekly increases.
\”A fall in interest rates from recent highs prompted some borrowers to take action,\” said Joel Kan, MBA vice president and deputy chief economist. \”Both applications for conventional loans and government refinances increased.
\”VA refinancing posted its 3rd consecutive week of double-digit growth even as current refinancing levels remain well below historical averages.
Applications for home loans fell 1% this week, down 11% from the same week a year ago.
While higher mortgage rates are certainly hurting affordability, today\’s buyers still face extremely low supply and intense competition fueling bidding wars.
Mortgage rates haven\’t changed much so far this week and there won\’t be much reaction to the minutes from the Federal Reserve\’s meeting on Wednesday (22nd).
\”In this environment of high transparency and frequent speeches by Fed members, it\’s hard to imagine the minutes causing any drama,\” wrote Mortgage News Daily chief operating officer Graham Graham.
\”For some market watchers this looks a bit like a shift in inertia: seeing minutes in the past has always led to rates rising or falling quickly.\”
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