Blaine, Minn. Brand new townhomes for sale with new construction financing and a $4,500 builder’s credit to attract new buyers.
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Mortgage interest rates eased last week after rising sharply in early July. That started a fire under the refinancing lawsuit, but did little to help prospective homebuyers.
Total mortgage application volume increased 1.1% last week compared to the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
This comes as the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 6.87% from 7.07%, with points falling to 0.66 from 0.74 (including origination fee) for loans with a 20% down payment. That rate was 5.82% the same week last year.
“Mortgage rates eased last week as markets responded positively to incoming data showing that US inflation continues to cool,” Joel Kan, an economist at MBA, said in a statement.
The lower rates prompted today’s homebuyers to call their lenders. Applications to refinance a home loan were up 7% for the week, but were still 32% lower year-over-year. The refinancing share of mortgage activity increased to 28.4% of total applications from 26.8% the previous week.
Mortgage applications to buy a home fell 1% for the week and were 21% lower than the same week in 2022. The weakness in home buying is exacerbated by falling supplies and rising home prices. Prices had cooled for much of last year, but are now picking up due to low supply and strong demand.
Mortgage rates haven’t moved much at the start of this week, still hovering in the high 6% range on the 30-year fixed. Markets and investors are now digesting on a quarterly basis earnings reports and trying to play with the next moves of the Federal Reserve.