On August 14, 2024, the Ashburn, Virginia development was completed.
Andrew Caballero-Reynolds | AFP | Getty Images
Mortgage rates fell again last week, not by much but enough to spur existing homeowners to look for some savings. The surge in refinancing was responsible for a 5.4% increase in total mortgage demand from the previous week, according to the Mortgage Bankers Association’s Seasonally Adjusted Index.
The average contract interest rate for a 30-year fixed-rate mortgage with qualifying loan balance ($766,550 or less) dropped from 6.69% to 6.67%, and points for a loan with 20% down dropped from 0.67 (including the origination fee) to 0.66 paid.
Home loan refinancing applications surged 27% weekly and were 42% higher than the same week a year ago. The percentage is large, probably because the base is still small. Today, mortgage rates for most borrowers are much lower than those currently being offered. From 2020 to the first half of 2022, interest rates were below 4%. Mortgage rates were 40 basis points lower last week than the same week a year ago.
The refinance share of mortgage activity increased to 46.8% of total applications from 38.7% the previous week.
Mortgage applications for home purchases fell 4% this week and were 4% higher than the same week a year ago. Demand from homebuyers has been increasing over the past few weeks as inventory has increased on the market.
“Purchase applications remain relatively strong, with annual increases in all but one week over the past three months. In addition to lower interest rates, purchase activity continues to be supported by ongoing housing demand and continued gradual inventory growth in many markets.” MBA economist Joel Kan wrote in a press release.
Mortgage rates started the week up 10 basis points, according to a separate survey by Mortgage News Daily. That wiped out most of last week’s losses. But today, with the release of the monthly Consumer Price Index, an inflation gauge, they could swing in either direction.
“Wednesday morning’s CPI data is undoubtedly the last piece of information the Fed will receive before deciding next week on ‘a rate cut or no rate cut,'” Matthew Graham, chief operating officer of Mortgage News Daily, wrote. Important piece of the puzzle. “The market certainly knows this. So a big deviation from predictions is certainly enough to move things forward. “
