Ty Wright | Bloomberg | Getty Images Potential home buyers walk past an ‘Open House’ sign displayed in the front yard of a property for sale in Columbus, Ohio. Mortgage demand continued to weaken, with homebuyers retreating the most last week. Overall mortgage application volume fell 2.5 percent last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Volume was nearly 10 percent lower than a year ago.
Purchase volume pulled back the most, with those applications falling 5 percent for the week and 2 percent annually. The signals are mixed, as real estate agents are reporting a surge in potential buyer activity through open houses in the past few weeks. Home sales fell at the end of the year, but so did mortgage rates, and agents report seeing higher demand in direct response to lower rates.
“I absolutely think it’s the interest rate, especially when they’re getting a 30-year mortgage and they’re going to be stuck with it for a long time,” said Laura Barnett, a Dallas area real estate agent who was surprised by the crowd of house hunters who came to one of her open houses last Sunday. “They have to make a really wise decision. They can always refinance later if it goes down, but they can never get this rate again if it goes back up.”
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to 4.69 percent from 4.76 percent last week, with points decreasing to 0.45 from 0.47 (including the origination fee) for loans with a 20 percent down payment. That rate was the lowest since April and just 19 basis points higher than one year ago.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to 4.69 percent from 4.76 percent last week, with points decreasing to 0.45 from 0.47 (including the origination fee) for loans with a 20 percent down payment. That rate was the lowest since April and just 19 basis points higher than one year ago. […]
Weekly mortgage applications fall 2.5% despite a sharp drop in rates
