Mortgage rates held steady last week, leaving room for homebuyers and those looking to refinance to get in while the getting is relatively good.
Purchase and refinance applications both reached five-week highs last week after mortgage rates held steady from the previous week, according to a report from the Mortgage Bankers Association.
The contract rate on the average 30-year fixed-rate mortgage remained at 7.61 percent for the week ending Nov. 10, one week after it dropped 25 basis points for the biggest slide in a year. The effective rate decreased slightly as points on the average rate with conforming loan balances fell.
The seasonally adjusted purchase index increased 3 percent from the previous week as buyers tried taking advantage of the mortgage rate easing. Purchase applications were down modestly on an unadjusted basis from the previous week, but up 12 percent year-over-year.
The trends were more positive for refinancing activity, which increased by 2 percent from the previous week and 7 percent from the previous year. The refinancing share of mortgage activity jumped to 31.9 percent as those disincentivized by the loss of the early pandemic’s low mortgage rates recognized a refinancing opportunity more favorable compared to a few weeks ago.
Nevertheless, both measures of mortgage activity remain historically low as the housing market struggles under elevated rates.
The weeks mortgage rates have spent at 7.61 percent have marked a relative reprieve for buyers and refinancers after rates hovered around 8 percent earlier this fall.
The biggest question for buyers and those looking to refinance is whether or not mortgage rates will continue to descend, or at least settle below that daunting 8 percent threshold. Property economist Thomas Ryan of Capital Economics said in a note last week that steady declines should come in the next couple of years and the peak may be behind the market.
That would be great news for buyers sidelined by high mortgage rates and a housing market grappling with high prices and low inventory.