By Aarthi Swaminathan
The U.S. 15-year mortgage rate is at the lowest level in two months, industry group says
The numbers: The U.S. housing market is feeling a chill once again as home buyers pull back on applying for mortgages with rates staying near 7%.
Yet some buyers are finding rates in the low 6% range by turning to 15-year fixed-rate mortgages instead of the traditional 30-year loan.
Nevertheless, weakening demand overall pushed the market composite index – a measure of mortgage application volume – down in the last week, according to the Mortgage Bankers Association (MBA) on Wednesday.
The market index fell 0.6% to 195.6 for the week ending March 29 from a week ago. A year ago, the index stood at 217.9.
Key details: The purchase index – which measures mortgage applications for the purchase of a home – fell 0.1% from a week ago.
The refinance index fell 1.6%.
The average contract rate for the 30-year mortgage for homes sold for $766,550 or less was 6.91% for the week ending March 29. That’s down from 6.93% from the week before.
The rate for jumbo loans, or the 30-year mortgage for homes sold for over $766,550, was 7.06%, down from 7.14% a week ago.
The average rate for a 30-year mortgage backed by the Federal Housing Administration was 6.74%, down from 6.75% a week ago.
The 15-year fell to 6.35% from 6.46% from the previous week. The 15-year fixed was at the lowest level in two months, the MBA said.
The rate for adjustable-rate mortgages was up to 6.37%, from 6.27% last week.
The big picture: Home buyers are putting off buying a home due to elevated mortgage rates straining how much they can afford.
Even though for-sale inventory has shown signs of rising in recent weeks, demand isn’t picking up, which means that sales activity will not pick up as quickly.
To be sure, the data does not fully capture buyer demand as some are buying homes without mortgages. A third of home buyers paid for their home purchases with cash in February, as real-estate brokerage Redfin notes.
What the MBA said: “Elevated mortgage rates continued to weigh down on home buying,” Joel Kan, vice president and deputy chief economist at the MBA, said in a statement. “Purchase applications were unchanged overall, although [Federal Housing Administration] purchases did pick up slightly over the week.”
-Aarthi Swaminathan
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04-03-24 0701ET
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