A house for sale in Houston, Texas on August 12, 2021.
Brandon Bell | Good pictures
Mortgage applications rose 2.2% last week compared to the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
Refinancing applications, which are usually more sensitive to weekly rate moves, rose 2% for the week, but were 86% lower than the same week a year ago. According to real estate data firm Black Knight, with interest rates at 7.16% a month ago, only a few net worths could benefit from refinancing — just 220,000.
Mortgage applications to buy a home rose 3% for the week, but they were down 41% from a year ago. Some potential buyers may jump back in after hearing that there is now less competition and more bargaining power, but there is still a shortage of homes for sale and prices haven’t dropped significantly.
Rates are still double what they were at the start of the year, but they eased somewhat last week. The average contract interest rate for 30-year fixed-rate mortgages fell from 6.90% to 6.67% for payments ($647,200 or less).
“The decline in mortgage rates should improve the purchasing power of prospective homebuyers, who have been largely marginalized since mortgage rates have doubled in the past year,” Joel Kahn, an MBA economist, said in a release. “With Rates Declining, ARM Shares [adjustable-rate] The number of applications also fell to 8.8% last week, down from a range of 10% and 12% in the past two months.”
Mortgage rates haven’t moved much this week due to the high volume of the upcoming Thanksgiving holiday.
“It’s not that things aren’t moving. They just aren’t moving,” said Matthew Graham, chief operating officer of Mortgage News Daily. “Expect things to return to normal next week, but the market will wait until December 13 and 14 for the biggest moves.”
That’s when the government releases its next major report on inflation and the Federal Reserve announces its next move on interest rates.