- The 30-year fixed mortgage rate fell to 6.40% from 6.45% last week, the Mortgage Bankers Association said Wednesday.
- But the housing market is "missing the customary burst in listings," the group said.
Mortgage rates are down but home buyers aren't scrambling to apply for a home loan as a lack of listings keeps market conditions tight.
The 30-year fixed mortgage rate fell to 6.40% from 6.45% in the week ended March 31, the Mortgage Bankers Association said Wednesday. That marked a fourth consecutive weekly decline. Mortgage rates have tracked a pullback in US debt yields as investors foresee the Federal Reserve approaching the end of its aggressive rate-hiking cycle.
The popular 30-year fixed rate was still higher than a year ago, at 4.80%.
Mortgage applications, meanwhile, fell 4.1% on a seasonally adjusted basis from a week earlier.
"Spring has arrived, but the housing market is missing the customary burst in listings and purchase activity that typically mark the season," Mike Fratantoni, chief economist at Mortgage Bankers Association, said in the group's survey release. "After four weeks of increasing purchase application activity, volume declined a bit this week even with another small drop in mortgage rates," he said.
Homebuyers are having difficulties finding properties with new listings down 20% from a year ago, according to Realtor.com's housing trends report for the week ended March 25.
Data for March data show the number of new listings was nearly on par with the April 2020 low, when the COVID pandemic was in its early stages.
"A smaller number of new options will be a challenge for buyers and the number of existing home sales, which remain low despite a significant pickup in February," said Danielle Hale, chief economist at Realtor.com, in its latest report.
Refinance applications fell 5% last week and are down 59% from a year ago, MBA said.
The MBA also noted that mortgage rate for jumbo loans increased by nine basis points to 6.36%. Jumbo loans surpass loan limits set by the Federal Housing Finance Agency for Fannie Mae and Freddie Mac.
The 30-year fixed rate of 6.4% was for conforming loan balances of $726,200 or less.
"While we have seen relative weakness at the high end of the housing market in recent months, the divergence in rates suggests that banks may be tightening credit in response to recent challenges, preserving balance sheet capacity as deposit balances have declined," said Fratantoni.