Mortgage rates dropped last week, and homebuyers jumped off the fence. They drove total mortgage demand up 6.3% compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 6.86% from 6.90%, with points remaining unchanged at 0.70 (including the origination fee) for loans with a 20% down payment.
While the drop in rates wasn’t exactly huge, there was a fair amount of pent-up demand among homebuyers. Some were waiting until after the election, some for lower rates, and some for more supply. All of those are now done.
Applications for a mortgage to purchase a home increased 12% from the previous week and were 52% higher than the same week one year ago. Last year at this time mortgage rates were higher, but falling. The supply of homes for sale, however, was extremely tight. It has improved markedly this year.
Homebuyer demand for mortgages jumps 12%, after first interest rate drop in over 2 months
