Consumers remain largely unmoved by the recent dip in mortgage rates. According to the Mortgage Bankers Association’s seasonally adjusted index, total mortgage application volume edged up just 0.9% compared to the previous week.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) fell to 6.94% from 7.02%, with points decreasing to 0.61 from 0.65 for loans with a 20% down payment. This marks the lowest rate since March.
“Last week’s Federal Open Market Committee meeting and the most recent inflation data caused mortgage rates to decline,” stated Mike Fratantoni, senior vice president and chief economist at MBA. Although purchase volume is currently more than 10% behind last year’s rate, Fratantoni continued, MBA is projecting a rise in home sales for the balance of the year as additional inventory enters the market.
Although there was a 2% increase in applications for properties this week, they were 12% less than the same week the previous year. Due to shifting interest rates, recent home sales have further slowed down; the housing supply is still limited and prices are still high.
This week’s start saw a little increase in mortgage rates, but on Tuesday they fell as a result of lower-than-expected retail sales figures.
The overall impression given to the American customer was less optimistic than it was a few months ago, according to Matthew Graham, CEO of Mortgage News Daily.