Mortgage demand stalls, even as interest rates moderate

The
usually
busy
spring
housing
market
is
underway,
but
mortgage
demand
isn’t
moving.
Application
volume
was
essentially
flat
last
week,
dropping
0.7%
compared
with
the
previous
week,
according
to
the
Mortgage
Bankers
Association’s
seasonally
adjusted
index.

The
average
contract
interest
rate
for
30-year
fixed-rate
mortgages
with
conforming
loan
balances
($766,550
or
less)
decreased
to
6.93%
from
6.97%,
with
points
decreasing
to
0.60
from
0.64
(including
the
origination
fee)
for
loans
with
a
20%
down
payment.

Applications
to
refinance
a
home
loan
fell
2%
for
the
week
and
were
9%
lower
than
the
same
week
one
year
ago.
Mortgage
rates
today
are
still
about
a
half
a
percentage
point
higher
than
they
were
at
this
time
last
year,
so
recent
borrowers
have
no
incentive
to
refinance.
Anyone
with
an
older
mortgage
than
that
likely
has
a
rate
that
is
half
of
what
is
currently
being
offered.

Applications
for
a
mortgage
to
purchase
a
home
decreased
0.2%
from
the
week
before
and
were
16%
lower
year
over
year.

“Purchase
applications
were
essentially
unchanged,
as
homebuyers
continue
to
hold
out
for
lower
mortgage
rates
and
for
more
listings
to
hit
the
market,”
said
Joel
Kan,
an
MBA
economist
in
a
release. “Lower
rates
should
help
to
free
up
additional
inventory
as
the
lock-in
effect
is
reduced,
but
we
expect
that
will
only
take
place
gradually,
as
we
forecast
that
rates
will
move
toward
6-percent
by
the
end
of
the
year.”

Mortgage
rates
have
basically
moved
sideways
to
start
this
week
and
are
unlikely
to
change
until
next
week,
when
more
economic
data
is
set
to
be
released.

“Rates
are
driven
by
bonds,
and
bonds
are
waiting
on
the
most
relevant
economic
data
to
offer
a
comment
on
the
path
of
inflation
and
the
economy
in
general,”
wrote
Matthew
Graham,
chief
operating
officer
at
Mortgage
News
Daily. “If
inflation
falls
a
bit
more
or
if
the
economy
shows
marked
signs
of
weakening,
it
would
tip
the
scales
in
favor
of
lower
rates.”