Mortgage demand sinks even as rates drop

Mortgage rates dropped for the second week in a row, but that didn't make people want to buy.

Rates fell 10 basis points last week and have declined 24 basis points in the last two weeks, but total mortgage demand dropped 5.4% from one week ago. There is a holiday adjustment to account for the Friday before Independence Day.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances fell to 5.74% from 5.84% with points increasing to 0.65 from 0.64 for loans with a 20% down payment

"Mortgage rates decreased for the second week in a row, as growing concerns over an economic slowdown and increased recessionary risks kept Treasury yields lower."

Applications to refinance a home loan dropped 8% for the week and were down 80% from the same week a year ago. The number of mortgage applications decreased from the previous week.

Home purchase applications went down for the week and the year.

The depressed applications for home purchases and refinances are due to the higherRates are still significantly higher than they were a year ago Kan said that purchase activity is hampered by affordability challenges.

The June housing report from Realtor.com shows for-sale inventory climbing at its fastest yearly pace of all time, up 18.7% year over year. There are less homes for sale in June than there are in June.

The inventory recovery grew in June for the second month in a row. Danielle Hale, chief economist at Realtor.com, said that they expect these improvements to continue, but that the typical buyer hasn't seen relief from quickly selling homes and high asking prices.

The average home purchase loan size was down from the previous week.