After rising throughout the majority of 2022, mortgage rates hit 7% last month, but have since fallen more than half a percentage point as inflation begins to cool and the Fed slows the pace of rate hikes. Though the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $647,200 or less decreased to 6.49% from 6.67% last week, refinance demand remains weak, and mortgage loan application volume is also on the decline, CNBC reports.
Despite the fact that roughly 100,000 more borrowers could currently benefit from a refinance with the latest rate drop, refinance demand last week was 13% lower than the week prior and was 86% lower than the same week one year ago.
“The economy here and abroad is weakening, which should lead to slower inflation and allow the Fed to slow the pace of rate hikes. Purchase activity increased slightly after adjusting for the Thanksgiving holiday, but the decline in rates was still not enough to bring back refinance activity,” noted Joel Kan, an MBA economist.
Related Stories
Housing Markets
Could These Midwestern Metros Be the Next Top Real Estate Markets?
Out-of-state homebuyers are flocking to Midwestern markets like Lafayette, Ind., and Topeka, Kan., where they're finding affordable homes, high-paying jobs, and robust local economies
Financing
Are Slower Rate Hikes Enough to Bring Buyers Back to the For-Sale Market?
Homebuyer demand rebounded slightly after a small dip in the 30-year fixed-rate mortgage, but an inflated economy continues to pose affordability challenges even in a cooling market
Affordability
Buyers Cite Unaffordable Prices as Biggest Hurdle to Homeownership in Q4 2022
Elevated home prices continue to pose an obstacle for house hunters, but most are persevering
