We are home! Homebuyers are back this month. Homebuyers in today’s housing market are incredibly sensitive to any changes in mortgage rates, which was demonstrated last week when rates experienced a sudden drop, prompting buyers to take action. According to the Mortgage Bankers Association, the average interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased from 6.40% to 6.30%, with points decreasing from 0.59 to 0.55, including the origination fee for loans with a 20% down payment. Although this was a weekly average decline, a more significant drop occurred in the middle of the week, driving demand.
The job market’s slowdown led to the decline in the 30-year fixed rate to 6.30%, the lowest it has been in two months.
Last week, mortgage applications to purchase a home increased by 8% compared to the previous week, but they were still 31% lower than the same week one year ago when interest rates were significantly lower. High mortgage rates, expensive homes, and limited supply have made it difficult for buyers to enter the market.
Applications for home loan refinancing, on the other hand, remained relatively unchanged from the previous week and were 57% lower than the same week last year. Few borrowers can benefit from a refinance at today’s interest rates. For those looking to tap their home equity, they are mostly opting for second loans instead of cash-out refinances.
This week, mortgage rates have risen, and their direction may depend on the government’s monthly report on inflation released on Wednesday.
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