The average contract interest rate for 30-year fixed-rate mortgages saw an uptick, marking the first increase in nine weeks. Rising from 6.67% to 6.72%, this change has contributed to a noticeable decline in mortgage demand. The Mortgage Bankers Association's seasonally adjusted index revealed a 6.2% drop in total mortgage application volume from the previous week, although it remains 6% higher than the same period last year.
Applications to refinance home loans encountered a significant decrease, falling 13% over the week. Despite this setback, refinancing applications were still 70% higher compared to one year ago. This week's rise marks the first increase in refinancing applications in over two months, highlighting fluctuating market conditions. Meanwhile, the points for loans with a 20% down payment edged higher, moving from 0.63 to 0.64, including the origination fee.
Mortgage rates have been relatively stable, shifting slightly lower at the start of the week. They have remained within a narrow 10 basis point range for almost three weeks. According to Mortgage News Daily, a separate survey on mortgage rates corroborated these findings. The Federal Reserve's recent announcement on rates and unexpected commentary from its chairman have added layers of complexity to the market dynamics.
Growing inventories of homes on the market and steadier mortgage rates are currently supporting homebuying activity this spring. Despite the rise in rates, "Purchase application volume inched up to its highest level in six weeks, led by a 3 percent increase in FHA purchase applications," noted Mike Fratantoni, MBA's SVP and chief economist.