Weekly mortgage refinancing demand drops as interest rates halve

Weekly mortgage refinancing demand drops as interest rates halve

The long period of low mortgage rates is wreaking havoc in the refinancing market, as most eligible borrowers have already gone through the process.

The average contractual interest rate for a 30-year fixed-rate mortgage with a compliant loan balance ($ 548,250 or less) remained unchanged at 3.03% last week, down 20% from at 0.29 (including principal charge) for loans. increased by 0.34 points. Payment.

As a result, mortgage refinancing requests fell 4% for the week, seasonally adjusted, and were only 2% higher than a year ago, the Mortgage Bankers Association reported. Rates were only 5 basis points higher at this time last year, but were lower last fall and earlier this year, so a large chunk of borrowers have lower rates. to what they are today.

“Recent uncertainty around the economy and the pandemic has kept rates low over the past month, which is why the refinancing index has moved around these levels,” said Joel Kahn, vice president associate of MBA economic and industrial forecasting.

Mortgage applications to buy a home increased 1% for the week, but are down 16% from a year ago. Home sales are slowing as potential buyers hit the wall of affordability. Home prices on the S&P Case Schiller National Home Price Index rose 18.8% in June, a record annual gain.

“Home buying activity is dominated by higher price points in the market, with the average purchase loan amount now standing at $ 396,500, the highest average in five weeks,” said Kahn said.

Mortgage rates started a little lower this week, but still haven’t gone up much. It can change in any direction.

“All lenders will face volatility in the days to come due to the release of several important economic reports in Friday’s Big Jobs report,” said Matthew Graham, chief operating officer at Mortgage News Daily.

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