US mortgage rates saw a slight uptick this week, reaching 6.75% for 30-year fixed-rate mortgages. While purchase applications rose, driven by conventional and VA loans, refinance demand dropped, marking the first decline in five weeks. The Mortgage Bankers Association attributes the purchase activity to improving inventory and a positive economic outlook. The market awaits the Federal Reserve meeting, anticipating a rate cut.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances increased to 6.75% from 6.67%Applications for a mortgage to purchase a home increased 1% for the week and were 6% higher than the same week one year ago.Total application volume fell 0.7% compared with the previous week, according to the Mortgage Bankers Association's seasonally adjusted index. That was the first decline in five weeks.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances increased to 6.75% from 6.67%, with points remaining unchanged at 0.66 for loans with a 20% down payment. That rate was just 8 basis points higher the same week one year ago.The driver of the drop was refinance demand. It fell 3% for the week but was still 41% higher than the same week one year ago.
Applications for a mortgage to purchase a home increased 1% for the week and were 6% higher than the same week one year ago. "Conventional and VA purchase applications drove this week's increase in purchase activity on a weekly and annual basis. Buyers remained active in the purchase market, helped by gradually improving inventory conditions and a more positive outlook on the economy and job market," wrote Joel Kan, vice president and deputy chief economist at the MBA.
"Markets know the Fed will cut and that the dot plot will show a higher rate trajectory than September," wrote Matthew Graham, chief operating officer at Mortgage News Daily."What we don't know is how gloomy of a dot plot or how hawkish of a Powell the market is willing to accept.
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