Holding steady two weeks ago, mortgage interest rates resumed their retreat last week, but this has not boosted mortgage demand.
The volume of mortgages decreased by 3.1% per week, according to the seasonally adjusted index of the Mortgage Bankers Association. The volume is 62% higher compared to the same week a year ago, when interest rates are significantly higher and refinancing activity is extremely low.
The average contractual interest rate on a 30-year fixed rate mortgage with an appropriate loan balance ($ 484,350 or less) decreases to 3.87% from 3.94%, reducing points to 0, 34 of 0.38 (incl. Generation fee) for loans with a 20% down payment. This percentage is 93 basis points higher than a year ago.
"Continued trade tensions between the US and China led to variable but still declining rates last week, reducing the 30-year fixed rate mortgage to 3.87%, its lowest level since November 201
Refinancing applications, which were strong last month, fell for the second consecutive week, which is 7% less than the previous week. The volume of refinancing was 152% higher than a year ago, but the annual comparison has shrunk over the last three weeks. Most of those who could benefit from refinancing and who wish to go through this process may have already done so.
Home mortgage applications, which are less reactive at lower rates, rose 4% in a week and were 5% higher than a year ago.
"Consumers continue to operate at these lower interest rates, but market volatility probably causes some borrowers to pause refinancing and purchase decisions," Kahn said.
Buying demand usually rises more when interest rates fall as much as they have, but housing prices are so high and affordable housing is so low that potential buyers push back. House price rises have been shrinking for most of this year, but are set to accelerate in July, according to several reports. This also coincided with the decline in the supply of homes for sale.
Mortgage rates continue to decline on Tuesday, falling to their lowest level in three years, according to Mortgage News Daily, which manages the day-to-day movements of the course. This was followed by another sale of the stock market as new tariffs take effect. Markets are already expecting monthly jobs Friday for more clues about the health of the US economy.