Another record low interest rate on the 30-year fixed mortgage last week did not help drag homebuyers out of their recent slump, CNBC reported. Declining demand from buyers caused mortgage application volume to fall 0.5 percent last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Mortgage applications to purchase a home fell 3 percent for the week and were 16 percent higher than a year ago. The annual comparison is now shrinking steadily. Loan amounts have been reaching new highs in the last several weeks due to skyrocketing home prices and comparatively stronger activity on the upper end of the market. Low rates are no longer offsetting these higher prices; in fact they are partially causing them. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to a survey low of 2.98 percent from 3.01 percent, with points decreasing to 0.35 from 0.38 (including the origination fee) for loans with a 20 percent down payment. That rate was more than a full percentage point higher than a year earlier. Low rates did help demand for refinances, which rose 1% for the week and were 67 percent higher annually. That is the highest level since August. Refinance demand may already be under pressure, however, as mortgage rates bounced decidedly higher since news organizations called the presidential election for Joe Biden.
