Mortgage rates remained relatively stable last week, yet homebuyer activity saw a decline amid broader economic concerns. According to the Mortgage Bankers Association (MBA), mortgage applications for home purchases fell by 4% compared to the previous week, although overall volume was up 3% from the same week a year earlier when interest rates were notably higher. The average rate for 30-year fixed mortgages with conforming balances decreased slightly to 6.89% from 6.90%, with points rising marginally from 0.66 to 0.67 for loans requiring a 20% down payment. This rate stands 40 basis points lower than a year ago.
Joel Kan, vice president and deputy chief economist at the MBA, noted that application activity, particularly for home purchases, is at its slowest since February, hindered by economic uncertainty and signs of labor market fragility. Despite these challenges, first-time homebuyers are still active, contributing to fewer declines in FHA purchase applications.
Refinance applications also decreased by 4% for the week but were still 42% higher than a year ago. The dip in refinance activity is attributed to rates staying close to 7%, with borrowers waiting for more substantial rate reductions. Consequently, the average loan size for refinances dropped to just under $290,000, marking the lowest level in three months.
As for the upcoming week, mortgage rates appear to be in a state of uncertainty, with potential changes expected as a series of economic data releases culminate in the critical monthly employment report due on Friday.
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