“Mortgage Rates Tumble,” the Federal Home Loan Mortgage Corporation, better known as Freddie Mac, declared Thursday.
The weekly average for a 30-year fixed-rate mortgage in the U.S. has fallen to 6.5%, a drop of 0.06 percentage points from the week ending Aug. 28, Freddie Mac reported, noting the downward trend is “increasing optimism for new buyers and current owners alike.”
At Mortgage News Daily, Thursday’s daily index hit 6.45% for a U.S. 30-year fixed-rate mortgage, down 0.04 percentage points from Wednesday, when the site noted rates had reached an 11-month low.
Still, the Seattle-based online brokerage Redfin posted Thursday that despite lower mortgage rates, “sales aren’t surging, likely because it’s still difficult for many Americans to afford a home.”
For the four weeks ending Aug. 31, Redfin said the median selling price for homes was $392,738, up 1.6% from a year earlier. The median monthly mortgage payment for that time period was 5% higher, at $2,593.
“Mortgage rates haven’t come down significantly enough to bring back a flood of buyers. House hunters are on rate watch, hoping they’ll drop below 6%,” Mariah O’Keefe, a Redfin real estate agent in Seattle, said in a Thursday post.
O’Keefe said some properties “are taking a long time to sell. The good news for buyers: sellers have come around to less demand; they’re motivated to sell and typically price homes fairly, or are willing to negotiate.”
Mortgage applications were down for the week ending Aug. 29, according to the latest weekly survey by the Mortgage Bankers Association. The decrease was 3% — 1.2% on a seasonally adjusted basis — from the prior week.
But applications to refinance existing mortgages were up 1% from the previous week, and 20% higher than the same week last year, the survey found, increasing the refinance share of mortgage activity slightly to 46.9%.
Joel Kan, the association’s vice president and deputy chief economist, suggested a slowdown.
The decline in mortgage rates “was not enough to spark more application activity,” Kan said in a Wednesday post, adding, “Purchase activity pulled back, after a four-week run of increases as slower home buying activity led to declines in applications across the various loan types.”