US mortgage demand falls 5.3% despite lower rates — CNBC

In the United States, the total volume of mortgage applications fell by 5.3% last week compared with the previous week, although loan rates declined somewhat. This was reported by CNBC, citing the seasonally adjusted index of the Mortgage Bankers Association.

Rate declines for the first time in more than two months

The average contract rate for 30-year fixed-rate mortgages with conforming loan balances of up to $832,750 declined from 7.50% to 7.41%. Points, including the origination fee, decreased from 0.83 to 0.75 for borrowers making a 20% down payment.

Mortgage Bankers Association economist Joel Kan said rates fell for the first time in more than two months. However, this was not enough to revive applications for either home purchases or refinancing.

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Purchase and refinancing applications fall

The number of refinancing applications fell by 2% over the week and by 59% compared with the same period last year. Rates are now more than one percentage point higher than a year ago, so the pool of borrowers who could benefit from refinancing remains small.

Applications for home purchase loans fell by 7% over the week and by 18% year-on-year. According to the National Association of Realtors, the number of pending home sales, measured by signed contracts, also dropped sharply in September.

The share of adjustable-rate mortgages remained at 10.5%. According to Kan, rates on such loans were nearly one percentage point lower than those for 30-year fixed-rate mortgages, giving qualified buyers an opportunity to obtain a lower initial rate.