Weekly mortgage refinance demand rose 5% after a slight dip in mortgage rates

Mortgage
rates
are
significantly
higher
than
they
were
at
the
start
of
this
year,
but
they
pulled
back
slightly
last
week
after
several
weeks
of
straight
increases.
That
was
enough
to
spark
some
new
demand,
especially
for
refinances.

The
average
contract
interest
rate
for
30-year
fixed-rate
mortgages
with
conforming
loan
balances
($766,550
or
less)
decreased
to
7.18%
from
7.29%,
with
points
unchanged
at
0.65
(including
the
origination
fee)
for
loans
with
a
20%
down
payment.

“Treasury
rates
and
mortgage
rates
fell
last
week
on
the
news
of
a
slowing

job
market,
with
wage
growth
at
the
slowest
pace
since
2021,
and
the

Federal
Reserve‘s
announced
plans
to
ease
quantitative
tightening
in
June
and
to
maintain
its
view
that
another
rate
hike
is
unlikely,”
said
Mike
Fratantoni,
MBA’s
senior
vice
president
and
chief
economist.

The
rate
for
Federal
Housing
Administration
loans
fell
below
7%
for
the
first
time
in
three
weeks,
which
is
a
welcome
sign
for
first-time
buyers,
who
tend
to
use
FHA
loans.

“First-time
homebuyers
account
for
roughly
half
of
purchase
loans,
and
the
government
lending
programs
are
an
important
source
of
financing
for
these
homebuyers.
The
gain
in
FHA
activity
is
a
sign
that
this
segment
of
the
market
is
active,”
Fratantoni
added.

The
dip
in
rates
caused
refinance
demand
to
increase
5%
for
the
week,
although
it
was
still
6%
lower
than
the
year-earlier
week.
Rates
are
70
basis
points
higher
than
they
were
a
year
ago,
so
there
are
very
few
borrowers
who
can
benefit
from
a
refinance.
A
basis
point
is
one-hundredth
of
a
percentage
point.

Applications
for
a
mortgage
to
purchase
a
home
rose
2%
for
the
week
but
were
still
17%
lower
than
the
same
week
a
year
earlier.
Affordability
is
hitting
potential
buyers
hard,
as

home
prices
continue
to
climb.
Tight
supply
is
keeping
the
competition
high,
resulting
in
very
few
bargains.

Mortgage
rates
fell
further
to
start
this
week.
The
next
big
piece
of

economic
data
comes
next
week,
with
the
release
of
the
monthly
consumer
price
index.
That
could
move
rates
sharply
in
either
direction,
depending
on
what
it
says
about
inflation.