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Mortgage rates drop for the first time in 2 months, but demand falls
CNBC • • business
Key Points:
- Mortgage application volume dropped 5.3% last week despite a slight decrease in the average 30-year fixed mortgage rate to 7.41%, according to the Mortgage Bankers Association.
- Refinance applications fell 2% week-over-week and remain 59% lower than a year ago, as higher rates limit the pool of borrowers who benefit from refinancing.
- Purchase mortgage applications declined 7% from the previous week and are 18% lower than the same period last year, reflecting buyer sensitivity to sustained higher interest rates.
- Adjustable-rate mortgages (ARMs) maintained a 10.5% share of applications, offering lower initial rates compared to fixed-rate loans, appealing to qualified borrowers despite higher risk.
- Mortgage rates showed volatility last week influenced by inflation reports, but have stabilized this week with movements somewhat linked to oil prices, though experts caution against relying on that correlation.
