After several weeks of volatility, mortgage rates calmed down, and that offered little incentive for homeowners or buyers to make a move.
Total mortgage application volume was essentially flat last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Volume fell 0.1% for the week but was 41% higher than the same week one year ago, thanks to a far more robust refinance market.
Applications to refinance a home loan decreased 1% for the week, but were 93% higher than the same week one year ago, when interest rates were considerably higher.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) increased to 4.07% from 4.06%, with points increasing to 0.36 from 0.35 (including the origination fee) for loans with a 20% down payment. That is 72 basis points lower than the rate one year ago.
“In a week of mixed mortgage rate movements across the various loan types, the 30-year fixed rate finished slightly higher than last week, but was still close to lows last seen in 2016,” said Joel Kan, an MBA economist.
Mortgage applications to purchase a home were up 1% for the week and 10% higher compared with the same week one year ago.
“A still-strong job market, improving affordability and lower mortgage rates continue to support growth,” added Kan.
Purchase demand is stronger this year, thanks to lower mortgage rates, but supply is still very weak, especially for more affordable homes. The number of homes for sale nationally fell slightly in June compared with a year ago, the first annual decline in inventory since last September, according to Redfin.
“Lower interest rates are bringing buyers back, but without enough homes for sale to meet demand, we expect to see more bidding wars, which will push prices up this summer,” said Redfin chief economist Daryl Fairweather.