After rising sharply for several weeks, mortgage interest rates pulled back slightly last week, but it wasn’t enough to revive mortgage demand.
According to the Mortgage Bankers Association’s seasonally adjusted index, total mortgage application volume fell 2.9% last week compared with the previous week. This marks the lowest decline in mortgage applications since December 1996.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 7.21% from 7.31%, with points falling to 0.69 from 0.73 (including the origination fee) for loans with a 20% down payment.
Applications to refinance a home loan — which are most sensitive to weekly interest rate changes — fell 5%, compared with the previous week, and were 30% lower than the same week one year ago.
Mortgage rates turned higher again to start this week, and more economic data in the coming days could impact rates further. While interest rates have moved in a narrow range for the past few weeks, 7% appears to be the new normal.
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