A sign advertising a home for sale is displayed outside a Manhattan building on April 11, 2024 in New York City.
Spencer Platt | beautiful images
Mortgage rates are significantly higher than they were at the beginning of this year, but fell slightly last week after several weeks of consecutive increases. That’s enough to spark some new demand, especially for refinances.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 7.18% from 7.29%, with points remaining unchanged at 0, 65 (including origination fee) for 20% down payment loans.
“Treasury yields and mortgage rates fell last week on news of slowing growth. Job marketwith wage growth at its slowest pace since 2021, and Federal Reserve“We announced our quantitative easing plan in June and maintain our view that another rate hike is unlikely,” said Mike Fratantoni, senior vice president and chief economist at MBA. happen”.
The rate on Federal Housing Administration loans fell below 7% for the first time in three weeks, a welcome sign for first-time homebuyers, who tend to use mortgage loans. FHA loan.
“First-time homebuyers account for about half of all home loans, and government loan programs are an important source of financing for these homebuyers,” Fratantoni added. The increase in FHA activity is a sign that this market segment is working.”
Falling interest rates caused refinancing demand to increase by 5% during the week, although still 6% lower than the previous week. Interest rates are 70 basis points higher than a year ago, so few borrowers can benefit from refinancing. A basis point is one hundredth of a percentage point.
Mortgage applications to buy a home increased 2% for the week but remained 17% lower than the same week last year. Affordability is having a strong impact on potential buyers, because house price keep climbing. Tight supply is driving up competition, leading to few bargains.
Mortgage rates continued to fall earlier this week. The next big part of economic The data is due next week, along with the release of the monthly consumer price index. That could cause interest rates to move sharply in either direction, depending on what it says about inflation.
