Potential homebuyers are responding to lower mortgage rates and a higher supply of homes for sale. That fueled mortgage demand last week, as consumers looking to refinance pulled back.
Total mortgage application volume rose 2.8% compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. An additional adjustment was made for the Thanksgiving holiday.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 6.69% from 6.86%, with points falling to 0.67 from 0.70 (including the origination fee) for loans with a 20% down payment. That is the lowest rate in more than a month.
“The recent strength in purchase activity continues, supported by lower rates and higher inventory levels, which are giving prospective buyers more options compared to earlier in the year,” said Joel Kan, an MBA economist, in a release.
Applications to refinance a home loan fell 1% for the week and were 7% lower than one year ago. Most borrowers today have loans with far lower rates than are being offered today.
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Economy
