On the whole, during this past week, mortgage rates have been stable. They continue to trade in their own small range, even tighter than the wider bond market. Today it’s 6.68%, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $806,500 or less. This is an increase from the statutory rate of 6.67%. Even with such a tiny adjustment, total mortgage application volume was down 1.4% from the previous week on a seasonally adjusted basis.
Yet mortgage rates have only increased slightly and that bump hasn’t had a huge effect on consumer activity. Applications to refinance a mortgage fell 3% on the week. However, these applications are still very strong relative to last year, still up 23% from the same week in 2022. In contrast, home buying applications increased by 0.1%, following a similar 0.1-point year-over-year increase of 23%.
Mortgage rates have changed very little this week, with no more than 2 basis points of movement. According to Matthew Graham, an industry expert, “Bonds (and, thus, rates) are still operating in the range seen in the 24 hours following the August 1st jobs report.” He specifically pointed out that mortgage rates have been stuck in an even narrower range than the rest of the bond market.
Points for 30-year fixed-rate mortgages with conforming loan balances have decreased to 0.60, a decrease from 0.64. This graphic takes into account the origination fee for loans that only need a 20% down payment. This small change represents a very different lending landscape in which stability reigns. Mortgage rates are a lot higher than the same period last year.
Joel Kan, a mortgage market analyst, commented on the current application trends, stating, “Purchase applications were little changed over the week but were at the strongest pace in four weeks and continued to run well ahead of last year’s pace.” This is a telling observation when it comes to today’s tight housing market. Buyers aren’t giving up either, despite the highest mortgage rates in two decades.