(Bloomberg) -- US mortgage rates eased last week to their lowest level since early February, while a further decline in home-purchase applications suggested even cheaper borrowing costs may be needed to stir demand.
The contract rate on a 30-year fixed mortgage slipped 5 basis points to 6.82% in the week ended July 19, according to Mortgage Bankers Association data released Wednesday. An index of mortgage applications to buy a home decreased 4% to the lowest level since the end of May.
While mortgage rates remain below 7%, they’re still twice as high as they were at the end of 2021. Combined with elevated home prices, many potential homebuyers have been shuffled to the sidelines, evidenced by waning sales of previously owned houses.
A National Association of Realtors measure of homebuyer affordability declined for a fourth straight month in May and stood at one of the lowest levels in the group’s data back to 1989.
MBA’s overall index of applications, which includes those for home purchases and refinancing, decreased 2.2% last week. The refinancing gauge edged up 0.3%.
The MBA survey, which has been conducted weekly since 1990, uses responses from mortgage bankers, commercial banks and thrifts. The data cover more than 75% of all retail residential mortgage applications in the US.
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