Homebuyers seizing the day as mortgage rates continue to slide – Inman

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Mortgage rates continue to retreat from their 2023 highs and would-be homebuyers are seizing the day, with applications for purchase loans surging by a seasonally adjusted 5 percent last week from the week before, the Mortgage Bankers Association (MBA) reported Wednesday.

Purchase loan applications tracked by the MBA’s weekly survey of lenders have now posted weekly gains for four consecutive weeks. But demand for purchase mortgages remained down 19 percent from a year ago, MBA Deputy Chief Economist Joel Kan noted for perspective.

In addition, applications to refinance were down 9 percent last week from the week before, and were up only 1 percent from the anemic levels registered at the same time a year ago.

Joel Kan

“The purchase market remains depressed because of the ongoing, low supply of existing homes on the market,” Kan said in a statement. “Similarly, refinance activity will likely be muted for some time, even with the recent decline in rates, as many borrowers locked in much lower rates in 2020 and 2021.”

Last week’s survey, which included an adjustment for the Thanksgiving holiday, covered the week ending Nov. 24, when mortgage rates were dropping for the fourth time in five weeks, to the lowest level in 10 weeks.

Since then, rates have continued to slide, with daily rate lock data tracked by Optimal Blue showing 30-year fixed-rate mortgages averaging 7.22 percent Tuesday. That’s the lowest level since Sept. 20, and a 61 basis-point drop from a 2023 peak of 7.83 percent registered on Oct. 25

Mortgage rates continue retreat from peaks

At 7.34 percent, rates on jumbo mortgages too big for purchase by Fannie Mae and Freddie Mac are down 89 basis points from their Oct. 26 peak of 8.23 percent.

Rates for FHA loans have dipped below 7 percent, falling 53 basis points from their Oct. 30 peak to 6.96 percent Tuesday.

Mortgage rates are coming down as bond market investors, who fund most mortgages, become increasingly convinced that the Federal Reserve is getting a handle on inflation and is not only done hiking rates but may reverse course and begin lowering rates in the spring. When investors pile into bonds and mortgage-backed securities, the heightened demand sends bond prices higher and brings yields down.

Mortgage rates registered their biggest one-day drop in nearly four years on Nov. 14 after the Bureau of Labor Statistics reported that the all-items Consumer Price Index (CPI) fell to 3.2 percent in October, down from 3.7 percent in September.

Bond market investors bet on Fed easing

Source: Yahoo Finance.

Yields on 10-year Treasury notes, a barometer for mortgage rates, have dropped sharply this week as evidence that inflation is easing continues to pile up and…