Mortgage demand stalls after mini refinance boom

Mortgage Rate Trends - The average rate on the 30-year fixed mortgage dropped to 634%, the lowest since September of last year [1][2] - Mortgage rates experienced volatility, initially falling to a three-year low before rising almost 25 basis points after the Federal Reserve cut rates [2] - A rise of 25 basis points can significantly impact the perceived savings and confidence in future rate decreases [2][5] Mortgage Demand - Overall mortgage demand stalled last week, despite falling interest rates [1] - Refinance demand increased by only 1% for the week, but was still 42% higher than the same week a year ago [2][3] - Mortgage applications to buy a home were essentially flat, up just 03% for the week, and up 18% from the same week a year ago [3] - Demand for adjustable-rate mortgages (ARMs) fell back again last week after a surge the week before [3] Borrower Behavior - Borrowers were seeking any type of savings on monthly payments, leading to initial interest in ARMs [3] - Significant savings, such as $1,000 per month on a large mortgage, could be achieved by switching from fixed rates (high sixes or 7%) to ARMs (well into the 5% range) [4][5] - Some believe the Federal Reserve will continue to cut rates, while others think the 10-year yield won't move much further [4]