Mortgages rates may nudge downward slightly.
The latest data from the Mortgage Bankers Association released this morning shows mortgage applications still continue to decrease from the highs they saw a year ago, but several economic signs suggest interest rates won’t continue to climb quickly which should lead to more stable buyer behavior through the end of the year.
Joel Kan, Deputy Chief Economist with the MBA, predicts mortgage rates will stay in the 6.67% territory due to signs of slowing inflation and slower wage growth, plus hints the Federal Reserve won’t increase interest rates as significantly as they have done the past several quarters.
This past week rates dropped slightly to 6.49% from 6.67% for 30-year, fixed rate conventional loans.
For the past week purchase applications increased slightly when adjusting for the Thanksgiving holiday, seeing a 4% increase compared to the week prior. Refinances continue to see steep declines, decreasing 13% from the week before and making up only about a quarter of the total volume of activity. Compared to a year ago refinances typically up two-thirds or more of the volume.
Adjustable rate mortgages have also seen an increase, making up 9% of total applications. Loans for FHA and Veterans Administration applications showed little change from last week, with FHA loans decreasing from 13.4% to 12.2% and VA loans increasing to 11.2% from 10.5%.