Economic concerns in the U.S. and overseas pushed mortgage rates to lows not seen since the start of 2015, but that did nothing to spur homebuyers.
Mortgage application volume decreased 2.4 percent last week from the previous week on a seasonally adjusted basis, according to the Mortgage Bankers Association.
Mortgage applications to purchase a home fell 5 percent from one week earlier but were 16 percent higher than the same week a year ago. Purchase applications are likely weaker due more to the lack of homes for sale than to any interest rate moves.
Applications to refinance a home loan, which are more rate-sensitive, didn’t get a lift either, falling 1 percent, seasonally adjusted, from the previous week. However, they are nearly 52 percent higher than a year ago, when interest rates were higher.
“Markets reacted to the weaker than anticipated job market report by recalibrating their expectations regarding the Fed’s next move. Additionally, global investors concerned about the potential for Brexit and its implications have once again led to a flight to safety, driving down Treasury yields,” said Michael Fratantoni, chief economist for the MBA. “As a result, conventional mortgage rates dropped to their lowest levels since 2015 last week, while FHA rates dipped to their lowest level since 2013.”
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased 3.79 percent, from 3.83 percent, with points decreasing to 0.32 from 0.33 (including the origination fee) for 80 percent loan-to-value ratio loans.