As the summer housing market gets underway, there are no signs of significant improvement following a lackluster spring. Home prices continue to climb, mortgage rates remain high, and the slight increase in home listings hasn't impressed potential buyers.
Weekly mortgage demand has stagnated for the second consecutive week. The Mortgage Bankers Association (MBA) reports that total mortgage application volume was nearly unchanged, increasing just 0.8% from the previous week.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) saw a marginal decrease from 6.94% to 6.93%, with points remaining steady at 0.61 for loans with a 20% down payment. This rate marks the lowest in over three months.
Refinance applications held steady week-to-week but showed a 26% increase compared to the same period last year. However, Joel Kan, an MBA economist, noted, “Lower rates, however, were still not enough to entice refinance borrowers back, as most continue to hold mortgages with considerably lower rates.”
Applications for home purchase mortgages rose by 1% for the week but were down 13% compared to a year ago. Zillow data indicates that total housing supply is 18% higher than it was a year ago, yet the market remains tight.
Kan added, “Purchase applications did see a small increase after adjusting for the Juneteenth holiday. Government purchase loans, primarily FHA and VA, saw gains of more than 2 percent over the previous week, as homebuyers in those segments sought to take advantage of the recent rate relief.”
Mortgage rates have remained stable at the start of this week and are expected to stay that way until Friday, when crucial reports on consumer spending and personal consumption expenditures prices are released. These reports often influence bond yields and, subsequently, mortgage rates.
This stagnant movement in mortgage rates and demand reflects the ongoing challenges in the housing market, impacting buyers and refinancers alike. For the latest updates and detailed analysis, stay tuned to KreditSanta.