Mortgage demand rises 2.2% as interest rates decline slightly

There was a slight decline in interest rates last week, which led to a rise in mortgage applications.

For the week, mortgage applications rose 2% but were still 81% lower than a year ago. According to Black Knight, there are only 220,000 people who can still benefit from a refinance, even with interest rates back from their recent high.

The number of mortgage applications to purchase a home was down from a year ago. There is still a shortage of homes for sale despite the fact that there is less competition and more negotiating power.

The rates are still double what they were at the beginning of the year, but they dropped a bit last week. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances decreased to 6.67% from 6.90% and points increased to 0.68 from 0.56 for loans with a 20% down payment.

The decrease in mortgage rates should improve the purchasing power of prospective buyers as mortgage rates have more than doubled in the past year. The share of loans with theadjustable rate decreased to 8.8% last week, down from the range of 10% and 12% in the past two months.

The upcoming Thanksgiving holiday doesn't seem to affect mortgage rates this week.

Matthew Graham, chief operating officer at Mortgage News Daily, said that things aren't moving as usual. Things are expected to get back to normal next week, but for the market to wait until December 13 and 14 for the biggest moves.

The next major report on inflation will be released by the government and the Federal Reserve will make a decision on interest rates.