Mortgage Loan rates fall for the third straight week, but demand still drops further


Mortgage rates soared over 7% just a month ago, but since then they have fallen more than half a percentage point. Still, mortgage loan application volume decreased 0.8% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) decreased to 6.49% from 6.67%, with points remaining at 0.68 (including the origination fee) for loans with a 20% down payment.

Mortgage applications to purchase a home gained 4% from the previous week but demand was 41% lower than the same week one year ago. Sales of existing homes continue to drop, while newly built home sales are benefiting from builder concessions, specifically deals in which the builder buys down the mortgage rate.

The adjustable-rate mortgage share of application activity increased slightly to 9%, which is lower than the roughly 12% range a month ago, when rates were higher. The ARM share, however, was about 3% at the start of this year, when the 30-year fixed rate hovered near a record low. ARM’s offer lower interest rates but higher risk.

Mortgage rates haven’t moved much to start this week, but by the end of the week that could change, as the highly anticipated monthly employment report is set for release. Any unanticipated swing in either direction will have a direct effect on mortgage rates.

Important points

  • The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) decreased last week to 6.49% from 6.67%.

Be the first to comment

Leave a Reply

Your email address will not be published.


*