Mortgage Demand Drops Week to Week Even as Interest Rates Dip

Interest rates fell again last week compared to the previous week, but so did mortgage demand. Record low mortgage rates were once a reason for buyers to purchase a home not too long ago, but as these rates have hovered around the same low for some time now, buyers are clearly unimpressed. The average contract interest rate for a 30-year fixed-rate mortgage with conforming balances of up to $510,400 dropped to 3.05% last week. Have no fear, mortgage applications to purchase a home are still 22% higher than a year ago, but did drop 2% last week compared to the previous week. 

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of up to $510,400 decreased to 3.05% from 3.10% last week, while points, including origination fee, increased to 0.52 from 0.46 for loans with a 20% down payment. That is the lowest in the 30-year history of the MBA survey. The rate was right around 4% one year ago.

Applications to refinance a home loan, which are usually sensitive to weekly rate moves, still fell 7% for the week, although they were still 52% higher compared with a year ago, according to the seasonally adjusted index.

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