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Mortgage Rates Fall Third Straight Week as Homebuyer Demand Keeps Sliding
Mortgage rates fell for a third straight week while homebuyer applications kept sliding, MBA data show.
Key points
- The average contract rate on 30-year fixed-rate mortgages fell to 7.3% from 7.37%, with points declining to 0.75 from 0.76.
- Purchase applications fell 2% from the previous week and were 19% lower year over year.
- The average rate on a 5/1 adjustable-rate mortgage dropped to 6.29% from 6.41%, and the ARM share kept climbing.
Why it matters. Borrowers remain about a full percentage point above last year's rates, which gives them very little incentive to refinance.
The average contract rate on 30-year fixed-rate mortgages slipped last week to 7.3% from 7.37%, according to the Mortgage Bankers Association (MBA). Total application volume fell 1.2% week to week, with purchase applications down 2% and 19% lower year over year, while refinance demand rose just 0.1%. MBA chief economist Mike Fratantoni credited the drop to the Federal Reserve holding off on further rate hikes at its October meeting.
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Mortgage Rates Fall Third Straight Week as Homebuyer Demand Keeps Sliding
Mortgage rates came down again last week, marking a third straight weekly decline. Mortgage application volume nonetheless dropped 1.2% from the previous week, according to the Mortgage Bankers Association. Demand had briefly bounced the week before but resumed its slide. Elevated home prices and inflation are straining affordability, which is keeping buyers away despite lower borrowing costs. The data suggests that falling rates alone have not yet revived housing demand.