The already competitive housing market is getting even more so, and that is now cutting into mortgage demand.
Even a small drop in interest rates couldn't bring more buyers in, although it did boost refinance demand slightly. As a result, total mortgage application volume last week was essentially unchanged, falling 0.6% from 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 ($548,250 or less) decreased to 3.27% from 3.30%, with points increasing to 0.41 from 0.39, including the origination fee, for loans with a 20% down payment. The rate was 41 basis points lower the same week one year ago.
Applications to refinance a home loan, which are highly sensitive to weekly rate changes, increased 2% from the previous week but were 42% lower year over year. The refinance share of mortgage activity increased to 65.2% of total applications from 63.3% the previous week. Given how much lower rates were a year ago, and even earlier this year, there is a shrinking population of borrowers who can benefit from a refinance.
Applications for a mortgage to purchase a home fell 3% for the week and were 9% lower than the same week one year ago.
It is not necessarily that buyer demand has fallen off, it is more likely that buyers simply can't find a home they like. The number of homes actively listed for sale at the end of November fell to another record low, according to Redfin, a real estate brokerage. Supply is leanest on the low end of the market, and prices are still rising at a fast clip.
"Both conventional and government purchase applications were down, while the average purchase loan increased for the second straight week to $416,200 — the second-highest amount ever. The elevated loan size is an indication that activity is more on the higher end of the market," said Joel Kan, MBA's associate vice president of economic and industry forecasting.
Mortgage rates began this week higher and climbed more on Tuesday after the stock market recovered from several down days. The expectation is that rates will continue to move higher, although likely in fits and starts, given the market volatility brought on by the Covid omicron variant.
"four" - Google News
December 22, 2021 at 07:00PM
https://ift.tt/3Em6znA
Mortgage rates fall to a four-week low, but homebuyers still pull back due to record low listings - CNBC
"four" - Google News
https://ift.tt/2ZSDCx7
https://ift.tt/3fdGID3
No comments:
Post a Comment