KEY POINTS
- The average interest rate for 30-year fixed-rate mortgages decreased to 3.17% from 3.18% last week, but the Mortgage Bankers Association said applications for a mortgage to purchase a home fell 3% and were 2% lower than the same week a year ago.
- “Tight housing inventory, obstacles to a faster rate of new construction, and rapidly rising home prices continue to hold back purchase activity,” said Joel Kan, an MBA economist.
High prices and low supply are finally taking some of the heat out of the housing market.
Even with interest rates falling slightly, mortgage application volume fell 4% last week from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. It fell to the lowest level since February 2020.
Applications for a mortgage to purchase a home fell 3% for the week and were 2% lower than a year ago. This is the second straight week that purchase demand was lower than a year earlier, even though mortgage rates are still lower.
Pending home sales, which are counted by signed contracts and are therefore an indicator of future closed sales, dropped a wider-than-expected 4.4% in April, according to the National Association of Realtors.