Don’t look now, but mortgage rates keep inching closer to a 6-handle.
The 30-year fixed-rate mortgage edged down to 7.18% this week from last week’s average of 7.24%, Freddie Mac reported Thursday.
Though that is still nearly a full percentage point above the year-ago mark, it is 22 basis points below the recent high of 7.4% recorded during the week of Oct. 15.
“Mortgage rates continued their downward trajectory this week, improving the environment for prospective homebuyers against a backdrop of strong economic growth,” Freddie Mac Chief Economist Sam Khater observed in a press release.
The 15-year fixed rate declined three basis points this week, averaging 6.57%.
Despite three consecutive weeks of falling rates, many prospective homebuyers haven’t budged from their seats on the sidelines.
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The Mortgage Bankers Association reported a 1.2% dip in mortgage demand last week, with seasonally adjusted purchase volumes decreasing by 2%. Refinances eked out a 0.1% weekly gain, according to MBA data, though they were down 60% year over year.
“Mortgage application activity remained subdued last week despite rates falling to their lowest level since September,” MBA President and CEO Bob Broeksmit noted in market commentary shared with Scotsman Guide on Thursday. “Prospective borrowers may be holding off decisions until rates and economic and political conditions settle.”
But Chris Affinito, chief revenue officer of Total Mortgage, shared anecdotal evidence that mortgage volumes have picked up following Tuesday’s midterm election results.
“Mortgages have rallied on back-to-back days, post midterms,” he said in an emailed note. “A positive for our industry as we are seeing a flight to quality trade that is looking like it is going to drive bond yields down.”
That uptick in mortgage activity cited by Affinito coincided with rate decreases.
The Mortgage News Daily Rate Index — which, unlike Freddie Mac’s data, accounts for upfront costs — showed the 30-year fixed fell eight basis points to 7.22% on Wednesday, followed by another dip Thursday to 7.17%.
