Mortgage Rates Drop Along with Demand

According to the Mortgage Bankers Association's Weekly Applications Survey, average mortgage rates fell last week from one week earlier. Rates were down across all loan categories, including 30-year fixed-rate mortgages with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. But despite decreasing rates, demand for mortgage applications fell as well. In fact, refinance activity was down 5 percent week-over-week and demand for loans to buy homes dropped 1 percent. Joel Kan, MBA's associate vice president of economic and industry forecasting, says purchase activity has slowed because of a lack of homes for sale. “The third straight week of declining purchase activity is a sign that rising home prices and tight supply are constraining home sales – especially in the lower price tiers,” Kan said. “Purchase applications were still above last year's pandemic-impacted low point, but fell behind the level of activity seen the same week of 2019.” The MBA's weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications.

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