By Aarthi Swaminathan
Mortgage rates fall for third consecutive week
The numbers: Mortgage rates fell to the lowest level in three months, drawing home buyers back into the market and increasing demand for mortgages.
The 30-year mortgage rate fell for the third consecutive week.
The rate cut caused the market composite index - a measure of mortgage application volume - to rise slightly last week, the Mortgage Bankers Association (MBA) reported Wednesday.
The market index rose 0.8% to 212 for the week ending June 21 from the previous week. A year ago, the index stood at 216.1.
Key details: The purchase index, which measures mortgage applications for the purchase of a home, rose 1.2% compared to the previous week.
The refinancing index fell 0.1%.
The average contract rate for 30-year mortgages for homes sold for $766,550 or less was 6.93% for the week ending June 21. That represents a decrease from 6.94% the previous week.
The rate on jumbo loans, or 30-year mortgages for homes sold for more than $766,550, was 7.04%, up from 7.12% the previous week.
The average rate for a 30-year mortgage backed by the Federal Housing Administration was 6.82%, up from 6.79% the previous week.
The 15-year bond fell to 6.46% from 6.47% the previous week.
The rate for adjustable rate mortgages rose from 6.27% to 6.29%.
The big picture: The housing market is only seeing a modest improvement in affordability in the face of falling rates.
Would-be homeowners tired of high rates are taking advantage of a relative drop in mortgage rates below 7%, sending mortgage applications soaring.
But that must be accompanied by a similar improvement in housing supply, which has not yet fully materialized. New listings rose 7.7% in mid-June, compared to last year, real estate brokerage Redfin said in an analysis. The average monthly mortgage payment increased 7.8% during the same period.
What the MBA said: "Mortgage rates were... [at] "The lowest level in more than three months," Joel Kan, vice president and deputy chief economist at the Mortgage Bankers Association, said in a statement.
"Loans for government purchases, mainly [mortgages backed by the Federal Housing Administration] and [Veterans Affairs]posted gains of more than 2% from the previous week," he added, "as homebuyers in those segments sought to take advantage of recent rate relief."
-Aarthi Swaminathan
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06-26-24 0700ET
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