People wait to visit a home for sale in Floral Park, Nassau County, New York.
Wang Ying | Xinhua News Agency | Getty Images
Mortgage rates fell for the second straight week, but that didn’t spur demand from homeowners or potential buyers.
Rates fell 10 basis points last week and are down 24 basis points over the past two weeks, but overall mortgage demand fell 5.4% from the previous week, according to data from the Mortgage Bankers Association. This week’s results include a holiday adjustment to account for early closings on the Friday before Independence Day.
The average contract rate for 30-year fixed-rate mortgages with matching loan balances ($647,200 or less) fell from 5.84% to 5.74%, with points rising from 0.64 to 0.65, including the setup fee, for loans with a 20% discount payment.
“Mortgage rates fell for the second straight week as growing concerns about an economic slowdown and rising risks of recession kept Treasury yields lower,” said Joel Kan, associate vice president of economic and industry forecasts at MBA.
Those concerns were reflected in home loan refinance applications, which fell 8% this week and 78% from the same week a year ago. The refinancing share of mortgage activity fell to 29.6% of all applications from 30.3% in the previous week.
Homebuyer applications also fell for the week and year — down 4% and 17%, respectively.
“Interest rates are still significantly higher than a year ago, which is why home purchase and refinance requests remain subdued. Purchasing activity is being hampered by ongoing affordability issues and low inventories,” Kan said.
Realtor.com released its June housing report last week showing inventory for sale rebounding and rising at the fastest annual pace ever, up 18.7% year over year. However, compared to June 2019, there are still 53.2% fewer homes for sale.
“Our June data shows that inventory recovery has accelerated, recording the second straight month of active listing growth in nearly three years. We expect these improvements to continue,” said Danielle Hale, chief economist at Realtor.com, but added, “The typical buyer is yet to see significant relief from fast home sales and record-high asking prices.
According to the Mortgage Bankers Association, the average home loan size is $405,200, down from $413,500 in the week ended June 24.