WASHINGTON–Mortgage rates fell last week to the lowest level since April, as applications to refinance a home loan rose 7% compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index, which also showed applications for new mortgages barely moved.
Demand was 40% higher than the same week one year ago, the report stated.
According to the MBA, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $806,500 or less, decreased to 6.79% from 6.88%, with points falling to 0.62 from 0.63, including the origination fee, for loans with a 20% down payment.
That rate is 24 basis points lower than the same week one year ago, the MBA data show.
‘More Sensitive’
“This decline prompted an increase in refinance applications, driven by a 10% increase in conventional applications and a 22% increase in VA refinance applications,” Joel Kan, vice president and deputy chief economist at the MBA, said in a statement. “As borrowers with larger loans tend to be more sensitive to rate changes, the average loan size for a refinance application increased to $313,700 after averaging less than $300,000 for the past six weeks.”
Little Movement in Purchase Mortgages
Applications for a mortgage to purchase a home barely budged, rising just 0.1% for the week and were 16% higher than the same week one year ago.
“Purchase activity was essentially flat over the week, as overall uncertainty continues to hold homebuyers out of the market,” added Kan in a statement.
