WASHINGTON–Like the weather in some parts of the country, mortgage rates dropped sharply last week, again driving more refinancing activity but doing little to spur homebuyer demand, new data show.
According to the Mortgage Bankers Association, total mortgage application volume last week was essentially flat, rising just 0.4% compared with the previous week.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $832,750 or less, decreased to 6.09% from 6.17%, with points falling to 0.53 from 0.56, including the origination fee, for loans with a 20% down payment, the MBA said, adding that was the lowest level since September 2022.
Other Data Points
The MBA data also revealed:
- Applications to refinance a home loan increased 4% last week from the week before and were 150% higher than the same week one year ago, when rates were 79 basis points higher.
- Applications for a mortgage to purchase a home dropped 5% for the week and were 12% higher year over year. While lower mortgage rates are improving affordability, home prices are still slightly higher than they were at this time last year and economic uncertainty is weighing heavily on consumers, the MBA said.
- Borrowers also sought more savings in adjustable-rate mortgages, which are slightly riskier but offer lower rates.
“The ARM share stayed above 8%, as ARM rates remained more than 80 basis points below conforming fixed rates,” Joel Kan, an MBA economist, said in a statement. “This is giving payment-sensitive borrowers or those seeking larger loans, an incentive to choose this product offering.”
