Mortgage rates and demand remain stuck

For the second week in a row, mortgage demand has barely moved, as interest rates also remain stuck in the mud.

Total mortgage application volume fell 0.5% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $806,500 or less, increased to 6.69% from 6.68%, with points remaining unchanged at 0.60, including the origination fee, for 80% loan-to-value ratio, or LTV, loans.

Applications to refinance a home loan fell 4% for the week and were 19% higher than the same week one year ago. The refinance share of mortgage activity decreased to 45.3% of total applications from 46.1% the previous week.

Applications for a mortgage to purchase a home rose 2% for the week and were 25% higher than the same week one year ago. That small gain made this the strongest week for purchase demand in a month, although that’s not saying much, given the very low level. The average purchase loan size rose to $433,400, the highest in two months. That reflects higher home prices.

“Prospective buyers appear to be less sensitive to rates at these levels and are more active, bolstered by more inventory and cooling home-price growth in many parts of the country,” said Joel Kan, an MBA economist, in a release.

Mortgage rates haven’t moved at all to start this week either, despite news that President Donald Trump fired Federal Reserve Governor Lisa Cook. The implication is that Cook’s successor, if there is one, would be supportive of a more aggressive cut in interest rates.