Housing Interest Continues to Fall as Mortgage Rates Drop to a Two-Month Low!Return to Blog
Lower mortgage rates are not prompting homeowners or potential homebuyers to contact their lenders, as other obstacles stand in their way. According to the Mortgage Bankers Association’s seasonally adjusted index, the total mortgage application volume fell 2.5% last week from the previous week.
The decline came even though the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) decreased to 3.17% from 3.20%, with points decreasing to 0.30 from 0.36 (including the origination fee) for loans with a 20% down payment. That is the lowest rate since the end of February.
Applications to refinance a home loan, which is highly sensitive to weekly rate moves, still fell 1% for the week and were 18% lower than one year ago. The rate on the 30-year fixed was 26 basis points higher a year ago, but rates were at record lows last fall, far lower than the current rate.
Mortgage applications to purchase a home fell 5% for the week and were 34% higher than a year ago. However, the annual comparison means little now because the housing market ground to a halt at this time last year, when the pandemic ran wild; and quarantine became the norm. It then rebounded dramatically in the summer and is only now beginning to lose steam again.
Homebuyers are facing bidding wars in competition for the record-low supply of homes for sale. That is causing home prices to skyrocket at the fastest pace in 15 years. Even today’s slightly lower interest rates are not enough to make up for the ever-increasing cost of buying a home — leading to purchase applications falling for four of the last five weeks.
If you have any questions or would like assistance in your property buying, selling, or management process, contact Darryl Glass today at (510) 500-7531. For your convenience, you may also schedule a call with Darryl at a future date here.