WASHINGTON–Even though mortgages rates actually declined last week, both refinance and purchase loan demand declined, with total mortgage application volume down 11% for the week, according to the Mortgage Bankers Association's seasonally adjusted index.
The MBA said mortgage applications to purchase a home declined 12% week to week and were 15% lower compared with the same week one year ago. Those numbers reflect the first decline in homebuyer demand since the third week in April.
The slowdown in applications won’t come as a surprise to many given that mortgage rates have risen over two full percentage points since the start of the year, and home prices are up more than 20% from a year ago.
The Mortgage Bankers Association reported average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) decreased to 5.49% from 5.53%, with points increasing to 0.74 from 0.73 (including the origination fee) for loans with a 20% down payment.
"General uncertainty about the near-term economic outlook, as well as recent stock market volatility, may be causing some households to delay their home search," said Joel Kan, an MBA economist, in a statement.
Meanwhile, the ABA also reported applications to refinance a home loan continued their landslide, falling another 10% week to week. Refinance demand was 76% lower than the same week one year ago.
The association’s data further show the adjustable-rate mortgage share of total applications remained high at 10.5%. It was around 3% at the start of this year.
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