People wait to visit a home for sale in Floral Park, Nassau County, New York.
Wang Ying | Xinhua News Agency | Getty Images
Mortgage rates fell for the second week in a row, but that didn’t revive demand from homeowners or potential buyers.
Interest rates fell 10 basis points last week and have fallen by 24 basis points in the past two weeks, but total mortgage demand is down 5.4% from last week, according to data from the Mortgage Bankers Association. This week’s results include the holiday adjustment to account for the early closing on the Friday before Independence Day.
The average contract interest rate for 30-year fixed rate mortgages with matching loan balances ($647,200 or less) decreased to 5.74% from 5.84%, with points increasing to 0.65 from 0.64, including origination fees, for loans increased by 20%. low paying.
“Mortgage rates fell for the second week in a row, as mounting concerns about an economic slowdown and increased risks of a recession dragged Treasury yields down,” said Joel Kahn, associate vice president of economic and industrial forecasting at the MBA.
Those concerns surfaced in home loan refinancing requests, which are down 8% on the week and down 78% from the same week a year ago. The share of refinancing in mortgage activity decreased to 29.6% of total applications from 30.3% in the previous week.
Home purchase orders also fell for the week and for the year – down 4% and 17%, respectively.
“Rates are still much higher than they were a year ago, which is why home purchase and refinancing orders remain low. Purchasing activity is hampered by ongoing affordability challenges and low inventory,” Kahn said.
Realtor.com published its June housing report last week which showed selling inventory recovered, rising at the fastest annual pace ever, up 18.7% year over year. However, there are still 53.2% fewer homes for sale compared to June 2019.
“Our data for June shows an acceleration of the inventory recovery, posting the second consecutive month of active listing growth in nearly three years. We expect these improvements to continue,” said Danielle Hill, chief economist at Realtor.com, but added: “The buyer has not even seen Now meaningful relief from homes selling quickly and at high asking prices.”
According to the Mortgage Bankers Association, the average home purchase loan size is $405,200, which is down from $413,500 for the week ending June 24.