Lower mortgage rates aren't enticing homebuyers much, as the spring housing season draws to a close.
Total mortgage application volume fell 3.3% last week compared with the previous week, according to the Mortgage Bankers Association's seasonally adjusted index. Volume was 15% higher than the same week one year ago, when interest rates were higher.
Mortgage refinance volume fell 6% for the week but was markedly higher than a year ago, up 29%. Interest rates at this time last year were 51 basis points higher, so fewer homeowners could benefit from a refinance.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) remained unchanged last week at 4.33%, with points decreasing to 0.42 from 0.43 (including the origination fee) for loans with a 20% down payment.
"Concerns over European economic growth and ongoing uncertainty about a trade war with China were some of the main factors that kept mortgage rates low last week," said Joel Kan, MBA's associate vice president of economic and industry forecasting.
Mortgage applications to purchase a home fell 1% for the week but were 7% higher annually. They have now fallen for three straight weeks.
Buyers are up against sky-high home prices, but prices have been softening for several months and are now seeing the smallest gains in seven years. Sales were weak this spring because of short supply on the lower end of the market and high prices in the middle of the market. Lower mortgage rates appear not to be helping much.
"It is possible that the trade dispute is causing potential homeowners to hold off on buying, with the fear that further escalation — or the lack of resolution — may have adverse impacts on the economy and housing market," Kan said.