U.S. mortgage rates fell to a fresh all-time low last week, an industry lobby group said Wednesday, but refinancing activity slumped, and purchases fell, amid a backlog of applications and record-high housing prices.
The MBA’s refinancing index fell 6.5% to 3,346.9 points, but still remains 52% higher than last year. while mortgage applications fell 4.7% for the week ending September 25. The seasonally-adjusted Purchase Index, which tracks mortgage applications for the purchase of a single family home, fell 1.9% to 320.9 points.
“Despite the decline in rates, refinances fell over 6%, driven by a 9% drop in conventional refinance applications,” said said Joel Kan, the MBA’s associate vice president of economic and industry forecasting. “There are indications that refinance rates are not decreasing to the same extent as rates for home purchase loans, and that could explain last week’s decline in refinances. Many lenders are still operating at full capacity