Mortgage rates edged up slightly last week, which cooled a previously surging refinance market. This caused overall mortgage application volume to drop by 1.3%, as per the Mortgage Bankers Association’s adjusted index. The average interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) rose marginally to 6.14% from 6.13%, with an increase in points to 0.61 from 0.57 for loans requiring a 20% down payment. This rate is notably 139 basis points higher than the same time last year.
“Last week’s data indicated an economy growing at a solid pace, even as inflation declines. Consequently, mortgage rates saw a modest increase,” said Mike Fratantoni, MBA’s SVP and chief economist.
Refinance applications dipped by 3% for the week but remained significantly up at 186% compared to the same period last year. Most borrowers currently have mortgages with rates below 5%, although recent homebuyers might still benefit from refinancing at today’s rates.
Applications for mortgages to purchase homes increased by 1% for the week and were 9% higher year-over-year. The fall housing market seems to be warming up slightly, with brokerages like Redfin noting an uptick in home tours recently. However, some potential buyers are holding off, hoping for even lower rates in the near future.
“Inventories of both new and existing homes have been rising throughout 2024, offering potential buyers more options and somewhat lower mortgage rates, enhancing affordability,” Fratantoni mentioned.
Early this week, mortgage rates dipped slightly again as bond yields fell amid escalations in the Middle East conflict. The next significant movement in interest rates could be influenced by the upcoming monthly employment report scheduled for release on Friday.
Original Story https://www.cnbc.com/2024/10/02/red-hot-refinance-demand-retreats-after-tiny-bump-higher-in-mortgage-rates.html
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