The average rate on a 30-year fixed mortgage for a conforming loan of $832,750 or less fell last week to 7.41% from 7.50%, the Mortgage Bankers Association said Wednesday. Points declined to 0.75 from 0.83 for loans with a 20% down payment. Joel Kan, an MBA economist, said it was the first decrease in more than two months.
The dip did not bring applications back. Total applications fell 5.3% from the previous week. Applications to buy a home fell 7% on the week and were 18% lower than a year earlier. Refinance applications fell 2% on the week and 59% from a year earlier. Kan said buyers were responding to the still-high level of rates, not the weekly move. Adjustable-rate loans held a 10.5% share, with rates almost a full percentage point lower. A Tuesday Realtors report showed a sharp drop in September pending sales. This survey does not rewrite an existing fixed-rate contract.
Could the move to 7.41% lower the payment on a fixed-rate mortgage you already have? No. The 7.41% average is for new conforming loans. An existing fixed payment stays at its contract rate, and fewer people applied.