People wait to visit a house for sale in Floral Park, Nassau County, New York.
Wang Yin | Xinhua News Agency | Getty Images
Mortgage rates fell for a second week in a row, but that didn’t revive demand from homeowners or potential buyers.
Interest rates fell 10 basis points last week and are down 24 basis points over the past two weeks, but overall mortgage demand fell 5.4 percent from a week ago, according to data from the Mortgage Bankers Association. This week’s results include a holiday adjustment to account for the early closing on the Friday before Independence Day.
The average contract rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) fell to 5.74% from 5.84%, increasing points to 0.65 from 0.64 , including the origination fee, for loans with a 20% down payment.
“Mortgage rates declined for a second straight week as growing concerns about an economic slowdown and heightened recession risks kept Treasury yields lower,” said Joel Kahn, MBA’s associate vice president for economic and industry forecasting.
Those concerns were reflected in home loan refinance applications, which fell 8% for the week and were down 78% from the same week a year ago. The share of refinancing mortgage activity fell to 29.6% of total applications from 30.3% the previous week.
Home purchase inquiries also fell for the week and year, down 4% and 17% respectively.
“Rates are still significantly higher than they were a year ago, so applications for home purchases and refinancing remain depressed. Buying activity has been hampered by continued affordability challenges and low inventories,” Kahn said.
Realtor.com released its June housing report last week, which showed that for-sale inventory is rebounding, climbing at its fastest annual pace ever, up 18.7% year-over-year. However, there are still 53.2% fewer homes for sale compared to June 2019.
“Our June data shows that the inventory recovery has accelerated, posting the second consecutive month of active listing growth in nearly three years. We expect these improvements to continue,” said Daniel Hale, chief economist at Realtor.com, but added, “The typical buyer has yet to see significant relief from brisk home sales and record high prices.”
The average home loan size was $405,200, down from $413,500 for the week ended June 24, according to the Mortgage Bankers Association.
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