Mortgage have fallen for the third week in a row. Although the drop in three weeks was the largest in 14 years, it is evaluated that it is not enough to expect a turnaround in housing demand as mortgage demand declines.
According to the Wall Street Journal (WSJ) and economic media CNBC on the 1st, the Mortgage Bank Association (MBA) announced that the average 30-year fixed mortgage loan rate for conforming loans (under $647,200) based on 20% down payment was the previous week It said it fell from 6.67% to 6.49%.
As of the 10th of last month, the average mortgage interest rate soared to 7.08%, but fell 0.59 percentage points as it plummeted to 6.49% in three weeks. This is the largest three-week decline since the 2008 global financial crisis.
Mortgage rates have been on a downward trend for three weeks in a row, but mortgage demand has shown a downward trend instead of a rebound. According to MBA, the number of mortgage applications daily decreased by 0.8% compared to the previous week. Even after adjusting for the Thanksgiving holiday effect, it showed a declining trend.
Demand for refinancing (refinancing) also declined. It plunged 13% from the previous week and 86% from a year ago. CNBC pointed out, “It is very unusual that the demand for refinancing has decreased despite the fact that there are more than 100,000 borrowers who can enjoy the effect of lowering interest rates if they refinance due to falling mortgage rates.” Mortgage applications for home purchases increased by 4% compared to the previous week but decreased by 41% compared to the same period a year ago.
The WSJ reported that although mortgage rates are falling enough to record the biggest drop in 14 years, it is not enough to expect a reversal in the momentum of the US housing market, which has entered a recession.
Compared to a year ago, the current mortgage interest rate is still more than twice as high, so home buyers who feel the burden of monthly payments are maintaining a wait-and-see attitude.
The housing market continues to be sluggish as interest rates are high, housing prices are high, and housing demand is also shrinking.
The Federal Reserve has not stopped raising interest rates, so if the Federal Open Market Committee (FOMC) on the 13th and 14th raises the base rate by 0.5 percentage points and additional interest rate hikes are announced, mortgage rates may rise again. Coming out.