Interest rates held relatively steady last week, near one-year lows, but homebuyers were not enticed.
Total mortgage application volume increased 1.3 percent on a seasonally adjusted basis for the week, versus the previous week, according to the Mortgage Bankers Association. The rise was fueled entirely by refinances.
Applications to refinance loans rose 3 percent from the previous week, seasonally adjusted, adding to bigger gains seen earlier this month, when rates were falling precipitously. Refinance volume is up 18 percent in the past four weeks.
Mortgage applications to purchase a home decreased 1 percent for the week, but are 17 percent higher than the same week one year ago. Homebuyers are out in force this spring but are being met by higher prices and steeper competition. Homebuilders are less confident about current sales than they were last month, even though they are reporting higher buyer traffic, according to a separate survey released Monday by the National Association of Home Builders.
"Builders remain cautiously optimistic about construction growth in 2016," NAHB chief economist Robert Dietz said in the report. "Solid job creation and low mortgage interest rates will sustain continued gains in the single-family housing market in the months ahead."
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 3.83 percent from 3.82 percent last week, with points decreasing to 0.32 from 0.33 (including the origination fee) for 80 percent loan-to-value ratio loans.
"Although incoming economic data were muddled, and the retail sales report was relatively weak, rates and stock markets rose through the week," said Mike Fratantoni, MBA's chief economist.
Interest rates so far have been unable to break to new lows, but they've hovered just above them and seem equally stubborn about moving much higher.