Pointers at Glance
- According to the Mortgage Bankers Association’s seasonally adjusted index, Mortgage applications increased 2.2% last week compared with the previous week, prompted by a slight decline in interest rates.
- According to real estate data firm Black Knight, Refinance applications that are usually most sensitive to weekly rate moves rose 2% for the week but were still 86% lower than the same week one year ago.
- Even with interest rates now back from their recent high of 7.16% a month ago, there are precious few who can still benefit from a refinance, just 220,000.
Mortgage applications to buy a home increased by 3% for the week, but they were down 41% from a year ago. Some potential buyers may now be venturing back in, hearing there is less competition and more negotiating power. However, there is still a shortage of homes for sale, and prices have to decrease significantly.
Rates are still twice what they were at the start of the year, but they eased somewhat in the last week. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances decreased to 6.67% from 6.90%, with points increasing to 0.68 from 0.56, including the origination fee for loans with a 20% down payment.
Joel Kan, an MBA economist, said in a release that the decrease in mortgage rates should improve the purchasing power of prospective homebuyers, who have been sidelined mainly as mortgage rates have doubled in the past year. With the decline in rates, the ARM share of applications also decreased to 8.8% of loans last week, down from the range of 10% and 12% during the past two months.
Expecting things to get back closer to normal next week, but for the market to continue to wait until December 13 and 14 for the most significant moves. That is when the government releases its following major report on inflation, and the Federal Reserve announces its next move on interest rates.