Mortgage Rates Move

A little interest rate drop wasn’t enough to spring the mortgage market back up, however refinances are elevated since the Brexit vote which caused the initial rate drop. The total mortgage application fell 3.5% just last week from the seasonally adjusted basis from the prior week, so says the Mortgage Bankers Association.

The rate sensitive refinance volume fell 4% last week; however it’s also 56% higher than this time last year even when rates were a bit higher. The fallen rates after the Brexit vote took the total number of borrowers benefiting from a refinance to 8.7 million.

Mortgage applications for homes are still up from a year ago, but are down 2% this week. A good thing about these is that they aren’t nearly as rate-sensitive each week.

Purchase applications are still being sought at a faster rate than last year, but this summer has slowed that after a strong start to the year.

America’s average contract interest rate for a 30-year fixed rate mortgage with conforming loan balances of $417,000 and less sunk to a 3.67% from 3.69%, and the points decreased 0.24% from 0.32 for the 80% loan-to-value loans.

Because home prices are still rising so fast, homebuyers haven’t been able to benefit as much from the lower rates. Prices are up 5.7% since June of last year, however down from a 5.9% gain in May. It’s still nothing to snub your nose at. Prices are still expected to rise another 5% throughout the year.

We are pretty sure mortgage rates won’t go as low as they did when Brexit became official, but they have yet to make any notable gains. Since July’s employment report was so positive, it could signal a boost to increase the rates.  It’s possible that bond yields could break out of their close range, and affect mortgage rates. 

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