Mortgage interest rates reached their lowest level since May 2023, prompting an increase in mortgage demand from both homebuyers and current homeowners. The Mortgage Bankers Association reported a 6.9% rise in total mortgage application volume last week, the highest level since January. The average contract interest rate for 30-year fixed-rate mortgages also decreased to 6.55% from 6.82%.Applications to refinance jumped by 16% for the week and were significantly higher than a year ago. However, applications for a mortgage to purchase a home only increased by 1% and were lower compared to the same week last year. The decrease in purchase activity is attributed to a gradual increase in for-sale inventory and homebuyers potentially waiting for lower rates.In response to the stock market rout on Monday, mortgage rates fell further. They rebounded on Tuesday following positive economic data. Matthew Graham, chief operating officer at Mortgage News Daily, highlighted that rapid movements in the bond market can lead to extreme fluctuations in mortgage rates. Despite the recent positive trends, there are fewer borrowers who can benefit from refinancing due to already low rates. The market remains uncertain as buyers weigh the possibility of lower rates against other economic factors.
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