In spite of the slight decline in rates last week, mortgage demand fell to its lowest level since December 2018

According to the seasonally adjusted index of the Mortgage Bankers Association, applications for mortgages to buy a house fell by 1%. Volume for the week was 14% less than that of one year earlier.

Mortgage rates have increased despite a modest decline.

The average 30-year fixed rate mortgage interest rate with conforming loan balances (less than $647,200) has fallen to 5.33%. Points have dropped to 0.51 and 0.60 respectively for loans with 20% down payments.

Joel Kan, an MBA economist, stated that mortgage rates dropped for the fourth consecutive week, driven by concerns about weaker economic growth, and recent stock market declines.

High interest rates, steep increases in property prices and rising interest rates are putting a severe strain on affordability. Prices continue to riseBecause there’s still so little supplyOn the market, however, different buyers see different images.

Kan stated that “Demand for the top end is very high, but the supply and affordability problems aren’t as harmful to first-time buyers.”

Average contract interest rates for 30-year fixed-rate mortgages that have jumbo loan balances greater than $647,000.200 fell to 4.93%, from 5.02%. As opposed to being sold by Fannie Mae and Freddie Mac, jumbo loans are mainly held in bank portfolios or investor accounts. Because of their higher credit scores, lenders consider them less risky. 

Refinance applications for a home loan were down 5% and 75% respectively from the previous week. These loans are more susceptible to changes in rates than purchases. No matter how rates have fallen in recent weeks, the refinance market has not rebounded. Many borrowers had already gone through the process last year when they were at an all-time low.

Mortgage rates were higher this week, as Mortgage News Daily reported, because of volatility in global markets

Matthew Graham, CEO of Mortgage News Daily wrote that high inflation in Europe as well as the ease of Covid lockdowns in China took their toll on bonds.