Grapevine

Mortgage rates hit lowest level since February 2023

Mortgage rates fell for the sixth straight week last week, but mortgage demand still seems to be waiting for something bigger.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 6.29% from 6.43%, with points falling to 0.55 from 0.56 (including the origination fee) for loans with a 20% down payment, according to the Mortgage Bankers Association. That is the lowest level since February 2023 and nearly a full percentage point lower than the same week one year ago.

"Treasury yields have been responding to data showing a picture of cooling inflation, a slowing job market, and the anticipated first rate cut from the Federal Reserve later this month," said Joel Kan, vice president and deputy chief economist at the MBA.

Total mortgage demand, however, rose just 1.4% for the week, according to the MBA's seasonally adjusted index. The results also included an adjustment for the Labor Day holiday.

Refinance applications only increased 1% week to week, but were 106% higher than a year ago. That may sound like a massive increase, but the numbers were so low last year, that even with that large gain, refinancing is still historically low.