Mortgage demand overall weakened again last week, even as interest rates fell slightly. For those still in the market, though, they are looking increasingly to adjustable-rate loans to get the lowest interest rate possible.
Total mortgage application volume dropped 4.7% last week 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, $806,500 or less, decreased to 6.43% from 6.46%, with points falling to 0.60 from 0.61, including the origination fee, for loans with a 20% down payment. The rate was just 7 basis points lower the same week one year ago.
Applications to refinance a home loan, which rose sharply in mid-September and then dropped back again two weeks ago, fell further last week, down 8%. Refinance demand is still 18% higher than it was the same week one year ago.
Borrowers head back to riskier mortgages, looking for any potential savings
