Even though interest rates have fallen from their recent highs, mortgage demand has remained the same.
The Mortgage Bankers Association reported that total volume was down last week.
The number of applications for a loan to purchase a home fell for the week but were still lower than a year ago. Competition is cooling in the housing market. Consumer confidence is being weakened by inflation and high prices.
The average contract interest rate for 30-year fixed-rate mortgage with conforming loan balances decreased to 5.74% from 5.82%, with points decreasing to 0.61 from 0.65 for loans with a 20% down payment.
An economist at the Mortgage Bankers Association said that economic uncertainty and affordability challenges are discouraging households from entering the market, leading to declining purchase activity that is close to lows last seen at the beginning of the pandemic.
He said that stabilizing mortgage rates and rising inventory may bring some buyers back to the market during the second half of the year.
The number of applications to refi a home loan fell 4% for the week and were 80% lower than a year ago. A year ago, the average rate on the 30-year fixed mortgage was 31%. Most borrowers have already gotten rid of their old rates. The share of mortgage activity that was refinanced decreased.
All eyes are on the Federal Reserve, which is expected to raise its benchmark lending rate on Wednesday.
Mortgage rates don't follow the federal funds rate, but they will respond to any commentary from Powell after the meeting.
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