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Mortgage rates appear to be stuck in a maintenance pattern, leaving borrowers with no particular incentive to act exclusively on refinancing. The overall volume of mortgage applications fell 1.9% last week from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. This is the lowest level since last July.
The average contractual interest rate for 30-year fixed rate mortgages with compliant loan balances ($ 548,250 or less) remained unchanged at 3.03%, down from 0.34 to 0.33 (including capital charges) for loans with a down payment of 20%.
“Refinancing volumes are down, while purchase volumes remain below expectations given the housing shortage in the market,” said Mike Fratantoni, MBA chief economist. “The economic data sent mixed signals, with slower job growth but a further drop in the unemployment rate in August. We expect a further improvement to reduce the Fed’s MBS purchases by the end of the year, which would lead to some hike. More pressure should be exerted on mortgage rates. “
Home loan refinancing applications fell 3% on the week and 4% from a year ago. Mortgage rates were about the same around this time last year, but they were lower at the start of this year, and there was a refinancing boom at the time. There is a decreasing number of borrowers who can now benefit from refinancing.
Mortgage applications to buy a home were essentially flat last week, down 0.2% from the week before. The volume of purchase requisitions is down 18% from the same week a year ago. Homebuyers are seeing more listings today, but prices continue to rise at an all time high, and some are off the market.
Following last week’s employment report, no significant economic data is expected anytime soon that will significantly affect interest rates.