- The average contract interest rate for 30-year fixed-rate mortgages with balances ($726,200 or less) fell to 6.48% from 6.50% last week.
- Applications for home loan refinancing increased by 10% last week compared to the previous week.
- Home mortgage applications rose 5% for the week, but were down 32% from the same week a year ago.
A scene for a real estate agent with Coldwell Banker Dynasty TC, left, is shown as he talks to a potential home buyer during an open house in Arcadia, California.
Jonathan Alcorn | Bloomberg | Good pictures
Mortgage rates edged lower last week after the chairman of the Federal Reserve hinted at a possible end to historic interest rate hikes. The drop was not substantial, but it was enough to increase the demand for current homeowners to refinance their mortgages to lower rates.
The average contract interest rate for 30-year fixed-rate mortgages with balances ($726,200 or less) fell to 6.48% from 6.50% last week. Loans with a 20% down payment, according to the Mortgage Bankers Association’s weekly survey. The rate was 5.53% in the same week a year ago. Mortgage rates for all loan types surveyed fell during the week.
As a result, home loan refinancing applications rose 10% last week, seasonally adjusted, compared to the previous week. Refinancing demand, however, remained low at 44% year-on-year.
“Mortgage applications responded favorably to the drop in rates last week, as the Fed may pause at current levels for the federal funds rate in anticipation of a tightening of fiscal conditions that will slow inflation and dampen economic and job growth,” wrote Joel Kahn. , MBA’s deputy chief economist, in a release.
Applications for a mortgage to buy a home rose 5% for the week, but were down 32% from the same week a year ago. Prices haven’t really fallen enough to offset higher home prices. Prices have been cooling since last summer, but are already heating up again this spring due to strong demand and very limited supply.
Mortgage rates rose sharply to start the week, according to a separate survey by Mortgage News Daily. The rise was attributed to investor sentiment that the regional banking crisis may ease. All bets are off on Wednesday when the government releases the Consumer Price Index, a monthly report on inflation. Any large deviation from expectations, in either direction, can move bond yields and consequently mortgage rates decisively.
