The average contract interest rate for 30-year fixed-rate mortgages increased to 3.06% from 2.99%, with points increasing to 0.34 from 0.30 for availing loans with a 20% down payment. That led to a drop in weekly demand.
“Mortgage rates followed an overall increase in Treasury yields last week, which started higher from the strong July jobs report before slowing because of weaker consumer sentiment and concerns about rising Covid-19 cases,” said Joel Kan, the Mortgage Bankers Association’s Associate Vice president of Economic and Industry Forecasting.
Mortgage rates are slightly lower compared to last August, but they are not as low as last fall. Therefore, the eligible pool of homeowners who has the chance to benefit from a refinance is comparatively smaller now.
“Despite a second-straight weekly decrease, average loan sizes remain close to record highs. This is a continuing sign that sales prices are still elevated, driven by stiff competition leading to accelerating home-price growth,” Kan added.