According to the seasonally adjusted index from the Mortgage Bankers Association, mortgage application volume hardly changed last week, declining 0.5% from the prior week.

Rates, meanwhile, slightly decreased last week, although they are still very close to a 22-year high.

With a 20% down payment, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan amounts (i.e., $647,200 or less) dropped to 7.06% from 7.16%, with points (including origination fees) decreasing to 0.73 from 0.88. In the same week last year, the rate was 3.24%.

The modest decline was sufficient to make a tiny dent in refinancing demand. Although they increased by 0.2% for the week, those applications were still 85% fewer than the previous year. Very few suitable borrowers are still available who don’t already have a rate lower than what is being provided right now.

Home purchase mortgage applications decreased by 1% for the week and were 41% lower than they were a year ago. Both real estate brokers and home builders claim that buyer activity has virtually stopped. Today’s purchasers, according to agents, don’t feel any rush, and some could even be waiting for rates to drop much further.

“Except for the ARM loan, the prices of all other types of loans are higher than 3 percent of what they were last year. These high prices continue to put pressure on the buying and selling of the real estate and have added to the ongoing problems affecting the housing market, as seen in the deterioration of housing and home sales,” said Joel Kan, an MBA expert.

According to Mortgage News Daily, mortgage rates started this week somewhat higher than they did last week, but everyone’s attention is now focused on the Federal Reserve meeting on Wednesday. Investors are more interested in what the Fed will indicate for future rate moves, even though it is largely predicted that the Fed will increase its funds’ rate by 0.75 percentage points. Some people think the Fed is about to stop raising interest rates or at least slow them down.

According to Matthew Graham, CEO of Mortgage News Daily, “if they go so far as to toss that bone to the market, it would certainly be favorable for rates at first.” “Rates are going to have a miserable [Wednesday] afternoon if they entirely avoid it. Volatility risk is considerable in both cases.

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