Roofs of houses in a gated residential community in Pico Rivera, California, on January 18, 2024.
Frederic J. Brown | Frederic J. Brown AFP | Getty Images
Mortgage rates fell for a fourth consecutive week last week, but neither current homeowners nor homebuyers seemed particularly impressed.
Total mortgage applications last week increased just 0.5% 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 balances ($766,550 or less) fell from 6.50% to 6.44%, with points falling from 0.60 to 0.54 (including the origination fee) for loans with a 20% down payment. This is the lowest rate since April 2023.
Despite the decline, refinancing demand fell 0.1% from the previous week. However, this number is 85% higher than the same week a year ago. The problem is that mortgage rates for the vast majority of borrowers are well below 6%. Refinancing is only really worth it if you can shave at least 75 basis points off your current interest rate.
Mortgage applications for home purchases increased 1% this week, but were down 9% from the same week a year ago.
“As has been observed in recent weeks, purchase applications have not changed much despite falling interest rates. As interest rates fall and for-sale inventory begins to increase, potential homebuyers are remaining patient,” said MBA Vice President and Vice President Joel Kan. .
Mortgage rates have been flat since the start of the week, with no major economic data to impact them. The next big move could come with the monthly jobs report next weekend.
