Mortgage demand sinks even as rates drop

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A 'for sale' sign hangs in front of a home on June 21, 2022 in Miami, Fla.

Mortgage rates dropped for the second week in a row, but that didn’t revive demand from homeowners or potential buyers.

Rates fell 10 basis points last week and have declined 24 basis points in the last two weeks, but total mortgage demand dropped 5.4% from one week ago, according to data from the Mortgage Bankers Association. This week’s results include a holiday adjustment to account for early closings the Friday before Independence Day.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) fell to 5.74% from 5.84%, with points increasing to 0.65 from 0.64, including the origination fee, for loans with a 20% down payment.

“Mortgage rates decreased for the second week in a row, as growing concerns over an economic slowdown and increased recessionary risks kept Treasury yields lower,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting.

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