Mortgage Rates Fall Again, But Demand Remains Stagnant

Anya’s Market Bites:

Mortgage rates have dropped for the sixth week in a row, hitting their lowest level since February 2023, yet mortgage demand hasn't surged as expected. Here's a breakdown of the current situation:

Highlights:

• 30-year fixed-rate mortgage: Rates fell to 6.29% from 6.43%, the lowest since February 2023.

• Market conditions: The drop is influenced by cooling inflation, a slowing job market, and expectations of a Federal Reserve rate cut.

• Mortgage demand: Increased by just 1.4% for the week, even with lower rates and a holiday adjustment.

• Refinance applications: Rose 1% week-to-week and 106% year-over-year, though refinancing remains historically low due to many homeowners having sub-5% rates.

• Purchase applications: Increased by 2% but are still 3% lower than this time last year.

• Ongoing challenges: Limited inventory and affordability issues continue to impact buyer decisions.

• Future outlook: The upcoming release of the consumer price index could further influence rate direction.

Despite a steady decline in mortgage rates, market hesitancy lingers, as external economic factors and housing constraints shape future demand.

(Source: CNBC)

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Anya Derebenskiy

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