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A realtor is shown showing with Coldwell Banker Dynasty TC, left, as she chats with a potential homebuyer during an open house in Arcadia, California.
Jonathan Alcorn | bloomberg | Getty Images
Mortgage rates fell slightly last week after the chairman of the Federal Reserve suggested a possible end to a historic series of rate hikes. The drop wasn’t huge, but it was enough to increase demand from existing homeowners hoping to refinance their mortgages to lower rates.
The average contract interest rate for 30-year fixed-rate mortgages with matching loan balances ($726,200 or less) fell last week to 6.48% from 6.50% the week before, with the score falling to 0.61 from 0.63 (including origination fees). ) for loans with a 20% down payment, according to the Mortgage Bankers Association’s weekly survey. The rate was 5.53% for the same week one year ago. Mortgage rates fell for all types of loans surveyed during the week.
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As a result, home loan refinance applications jumped 10% last week, compared to the previous week, seasonally adjusted. However, demand for refinancing remained 44% lower year-on-year.
“Mortgage applications responded positively to lower interest rates last week, with the Federal Reserve signaling a possible pause at the current level of the federal funds rate in anticipation of slowing inflation and tightening financial conditions that will slow economic growth and job growth,” Joel Kahn wrote. , deputy chief economist for the MBA, in a statement.
Home mortgage applications increased 5% during the week, but were 32% lower than in the same week last year. Prices haven’t really fallen enough to offset the rise in housing prices. Prices started to cool off last summer, but have really reheated this spring due to strong demand and very low supply.
Mortgage rates have risen sharply to start this week, according to a separate survey from Mortgage News Daily. The increase was attributed to investors’ confidence that the regional banking crisis may abate. All bets are off on Wednesday, however, when the government releases the Consumer Price Index, a monthly report on inflation. Any significant divergence from expectations, in either direction, could move bond yields, and thus mortgage rates, decisively.
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