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Mortgage demand jumps as interest rates fall

A “For Sale” sign is displayed in front of a property in Monterey Park, California on August 16, 2022.

Frederick J. Brown | AFP | Getty Images

Mortgage interest rates have been falling for the third week in a row, while demand for mortgages has also risen again.

Total claims increased 7% last week from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.

The average contractual interest rate for 30-year fixed-rate mortgages with a qualifying loan balance ($726,200 or less) decreased to 6.2% from 6.23%, with the interest rate increasing to 0.69 from 0 .67 (including issuance fee) for loans from 20% down. payment. This figure was about half what it was a year ago.

Applications for home loan refinancing showed the sharpest increase, up 15% compared with the previous week. They were still 77% lower than the same week a year ago, but that year-on-year gain is now shrinking fast.

Mortgage applications to buy a home rose 3% on the week but are down 39% year on year. Homebuyers are still returning to the market as home prices ease slightly. However, the selection is still limited as stocks are low.

“Home buying activity remains tepid, but if rates continue to fall and home prices cool further, we expect potential buyers to return to the market,” said MBA economist Joel Kahn. “Many people have been waiting for accessibility issues to go away.”

Mortgage rates have risen slightly since the beginning of this week, but are still within a new lower range. Some real estate brokerages such as Redfin are reporting increased buyer interest at rates at these levels, but the housing market still appears to be on hold as potential sellers and buyers sit around waiting for prices to shake up.


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