The sudden drop in mortgage rates did little to increase demand.

A home for sale in the Mission Hills area of ​​Los Angeles Tuesday, October 11, 2022 in Mission Hills, CA.

Brian Van Der Brug | Los Angeles Times | Getty Images

The number of mortgage applications increased by 2.7% last week compared to the previous week, according to the data set by the Mortgage Bankers Association. Another adjustment was made for the Veterans Day holiday.

This small increase was followed by the government’s report last week which indicated that the price of money has started to decrease. That, in turn, sent bond yields falling and mortgage rates along with them. Thursday saw the steepest one-day drop in the average 30-year fixed-mortgage rate since daily records began in 2009.

On a weekly average, the rate on a 30-year fixed-rate mortgage with a consistent loan balance ($647,200 or less) decreased to 6.9% from 7.14%, with scores decreasing to 0.56 from 0.77. (including the origination fee) for loans with a 20% down payment.

Every day, the rate on Thursday just dropped 60 basis points, according to a separate study from Mortgage News Daily.

Applications for home loan refinancing fell 2% for the week and were 88% lower than the same week last year. The price drop came at the end of the week, and Friday is a federal holiday, Veteran’s Day, so the unmet need could be refinanced. in the fall.

Home mortgage applications, which don’t usually respond quickly to interest rate changes, rose 4% for the week and were 46% lower than the same week a year earlier. ago.

“Sales applications increased for all types of loans, and the average loan sales fell to its lowest amount since January 2021,” said Joel Kan, a broker of the Mortgage Bankers Association.

Loan sizes may drop significantly due to falling home prices or more first-time buyers re-entering the market at entry level.

There wasn’t much movement in the mortgage rate to start this week, but the yield in the US 10-year Treasury It fell on Tuesday, first thing in the morning after months of US producer prices rising at a slightly faster pace than expected.

They fell further later, hitting near six-week lows, after the dollar gained guns hit Poland, killing two people. That has fueled fears of more political instability in the already war-torn region. The mortgage rate follows the 10-year Treasury rate.

A sharp drop in bond yields affects mortgage rates

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