Mortgage rates fell for the fourth consecutive week, with the average contract interest rate for 30-year fixed-rate mortgages decreasing to 6.44% from 6.50%. Despite this drop, demand for refinancing only increased by 0.1%, as many borrowers already have mortgages with rates lower than 6%. The threshold for refinancing is generally considered to be a reduction of at least 75 basis points off the current rate. Applications for mortgage purchases did rise by 1% for the week, but were still 9% lower compared to the same week last year.
The Mortgage Bankers Association reported that total mortgage application volume increased by only 0.5% last week. The average contract interest rate for conforming loan balances decreased to the lowest rate since April 2023. Rates have come down more than 80 basis points from a year ago. However, despite these lower rates, the demand for refinancing has not seen a significant increase. Prospective homebuyers are staying patient as rates continue to drop and the inventory of homes for sale has started to increase.
While mortgage rates have been flat at the beginning of this week, the next significant market move could come with the release of the monthly employment report at the end of the week. With no significant economic data influencing rates at the moment, the market remains stable. Homeowners and potential homebuyers are closely watching for any shifts in rates that could impact their decision-making. The decrease in mortgage rates has not yet sparked a surge in refinancing or home purchases, as many borrowers with existing mortgages have rates below the current market average.
It is important for borrowers to consider the costs associated with refinancing before making a decision. While lower rates may seem appealing, the overall savings should outweigh the expenses involved in refinancing. As rates continue to decrease, some homeowners may find it beneficial to refinance their existing mortgages to lower their monthly payments. Prospective homebuyers are also closely monitoring the market, especially as inventory levels have started to increase, providing more options for those looking to purchase a home.
The mortgage market remains stable, with rates decreasing for the fourth consecutive week. Despite this drop, demand for refinancing has not seen a significant increase, as most borrowers have rates lower than the current market average. Prospective homebuyers are staying patient as rates continue to drop and the inventory of homes for sale has started to increase. The next significant market move could come with the release of the monthly employment report at the end of the week, potentially impacting mortgage rates and borrower decisions. As the market continues to evolve, homeowners and potential homebuyers are closely monitoring the situation to determine the best course of action for their financial needs.
