Mortgage demand is falling in response to low inventory available to buyers and sustained higher rates. CNBC’s Diana Olick reports:
Mortgage rates fell back from their recent highs, but demand dropped for the fourth straight week.
Total mortgage application volume declined 1.4% last week, 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 ($726,200 or less) decreased to 6.81% from 6.91%, with points falling to 0.66 from 0.83 (including the origination fee) for loans with a 20% down payment. That was still, however, the second-highest weekly average rate of 2023 to date.
Applications to refinance a home loan fell 1% for the week and were 42% lower than the same week a year ago. The refinance share of mortgage activity increased to 27.3% of total applications from 26.7% the previous week.
Applications for a mortgage to purchase a home slipped 2% for the week and were 27% lower than a year ago.
“Purchase activity is constrained by reduced purchasing power from higher rates and the ongoing lack of for-sale inventory in the market, while there continues to be very little rate incentive for refinance borrowers,” said Joel Kan, MBA’s deputy chief economist. “There was less of a decline in government purchase applications last week, which was consistent with a growing share of first-time home buyers in the market.”
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