Mortgage rates decreased for the third consecutive week, falling to 6.67% for 30-year fixed-rate mortgages with conforming loan balances of $766,550 or less. The drop in interest rates has led to a surge in refinances, with applications increasing by 27% week-to-week and 42% compared to the same period last year.
According to the Mortgage Bankers Association’s seasonally adjusted index, mortgage demand rose 5.4% from the previous week, driven by a 46.8% share of refinances. Applications for home purchases fell 4% but remained higher than this time last year.
Industry experts attribute the surge in refinances to lower interest rates, which are now 40 basis points lower than they were at the same point last year. Mortgage rates have been on a downward trend since 2020, with some rate experts warning that Wednesday’s release of the monthly consumer price index could impact future decisions from the Federal Reserve.
“It’s no secret that Wednesday morning’s CPI data is crucial for the Fed’s decision-making,” said Matthew Graham, chief operating officer at Mortgage News Daily. “A big deviation from forecasts would certainly get things moving.”
Source: https://www.cnbc.com/2024/12/11