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Mortgage Demand Drops Week to Week Even as Interest Rates Dip

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Mortgage Demand Drops Week to Week Even as Interest Rates Dip


September 30, 2020
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By MIND AND I

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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