A display for a Realtor with Coldwell Banker Dynasty TC, displayed at left, as she speaks with a potential homebuyer during an open house in Arcadia, Calif.
Jonathan Alcorn | Bloomberg | Getty Images
Mortgage rates fell slightly last week after the Federal Reserve chairman suggested a possible end to a historic string of interest rate hikes. The decline was not substantial, but it was enough to spur demand from current homeowners hoping to refinance their mortgages at lower rates.
The average contract interest rate for a 30-year fixed-rate mortgage with a conforming loan balance ($726,200 or less) decreased to 6.48% from 6.50% last week, falling points from 0.63 to 0.61 (including origination fees) ) loans with a 20% down payment, according to the weekly survey of the Mortgage Bankers Association. The rate was 5.53% for the same week a year ago. Mortgage rates decreased during the week for all loan types surveyed.
As a result, applications for home loan refinance rose 10% last week compared to the previous week, seasonally adjusted. Refinance demand, however, was still down 44% year-on-year.
Joel Kahn wrote, “Mortgage applications responded positively to a drop in rates last week as the Fed held the federal funds rate at the current level in anticipation of slowing inflation and financial conditions slowing economic and job growth.” indicated possible stagnation.” , MBA’s deputy chief economist, in a release.
Mortgage applications to buy a home increased 5% for the week, but were down 32% compared to the same week a year ago. Rates haven’t really dropped enough to offset higher home prices. Prices have been cooling off since last summer, but are already heating up this spring due to strong demand and very little supply.
Mortgage rates rose sharply to begin this week, according to a separate poll by Mortgage News Daily. The increase was due to investor sentiment that the regional banking crisis may be waning. All bets are off on Wednesday, however, when the government releases the Consumer Price Index, the monthly report on inflation. Any large deviation in either direction from expectations can push up bond yields, and consequently mortgage rates, decisively.