Mortgage rates dropped slightly last week, but homebuyers didn’t rush to apply for loans. According to the Mortgage Bankers Association, total mortgage applications fell by 3.9% compared to the previous week.
Interest Rates Continue Narrow Trading Range
The average 30-year fixed mortgage rate decreased from 6.98% to 6.92% for loans up to $806,500. While this sounds like good news, rates have barely moved over the past two months. Last year at this time, rates were only slightly higher at 7.07%.
Refinancing applications dropped 4% for the week, though they’re still 42% higher than last year. However, refinance volumes remain extremely low overall. Many homeowners are waiting for bigger rate cuts before refinancing their current loans.
Home Purchase Applications Show Mixed Signals
Applications to buy homes fell 4% last week but remain 18% higher than the same period last year. This increase is mainly due to more homes being available for sale – the highest inventory levels in five years.
Despite higher mortgage demand compared to last year, actual home sales are still lower. The spring selling season has been disappointing, with buyers hesitant to commit at current rate levels.
The mortgage market is waiting for Friday’s employment report, which could influence the next significant rate movement. Until rates drop more substantially, mortgage demand will likely remain sluggish despite increased housing inventory.
This blog post is for information and educational purpose only. It should not be considered personalized investment advice.