Mortgage demand slips further, even with slightly lower interest rates

A sign for sale in front of a listed home for over $1 million on April 29, 2022 in San Francisco, California.

Justin Sullivan | Getty Images

Mortgage rates turned lower for the second week in a row, but that wasn’t enough to boost demand for new purchase loans or refinancing, according to a weekly report from the Mortgage Bankers Association.

Rates are still much higher than in the past two years. Last week, the average contract interest rate for 30-year fixed-rate mortgages with matching loan balances ($647,200 or less) fell to 5.46% from 5.49%, with points dropping to 0.60 from 0.74 (inclusive of construction fees) For loans with 20% down payment.

Home loan refinancing requests are down 2% over the week and are 75% lower than the same week one year ago.

“Most refinancing borrowers remain on the sidelines as a result, and requests for refinancing have fallen in nine of the last 10 weeks,” said Joel Kahn, vice president for economics at the MBA. Compared to January 2022, refinancing activity is down 66%. “. and industry forecasting.

Homebuyers are also falling back. Mortgage applications to buy a home have been flat from week to week and are down 16% from a year ago.

More supply is coming to the market, but homes are suddenly on sale for longer.

Mortgage demand from homebuyers is now approaching the lows last seen in spring 2020. At the beginning of the covid pandemic. Home buying rebounded quickly after that, and frenetic demand has pushed prices up at an astonishing rate over the past two years.

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Now those high prices Marginalization of potential buyersEspecially people who are looking to buy their first home.

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