Mortgage demand has sharply decreased, with total application volume falling 2.9% week-over-week and 5% year-over-year, marking the first annual decline since April. The average interest rate for 30-year fixed-rate mortgages rose to 6.81%, up from 6.76%, while points decreased slightly.
Mike Fratantoni, chief economist at the Mortgage Bankers Association, noted that the increase in mortgage rates has weakened overall demand for both refinancing and purchasing loans. Refinance applications dropped 2% for the week and were down 9% compared to the same week last year, while purchase mortgage applications fell 4% week-over-week and 3% year-over-year.
Although there is more housing supply and buyers have gained some negotiating power, high prices and rising rates are counteracting potential savings. However, mortgage rates have begun to decline slightly due to easing oil prices and improved conditions in the bond market, with the average 30-year fixed rate now at its lowest in over two weeks