In this Friday, September 21, 2012 photo, a home is for sale in Oklahoma City. Average US fixed mortgage rates fell again to new record lows. The decline suggests that the Federal Reserve’s economic stimulus may have an impact on mortgage rates. Mortgage buyer Freddie Mac said on Thursday, September 27, 2012, the interest rate on the 30-year loan had fallen to 3.40 percent. This is a 3.49 percent drop from last week’s interest rate, its lowest level since long-term mortgages began in the 1950s. (AP Photo / Sue Ogrocki)

Sue Ogrocki

Mortgage rates hit another record low last week – the 15th this year and the second record in as many weeks.

However, the decline did not result in any significant change in weekly mortgage applications, but demand is much stronger than a year ago.

The total volume of mortgage applications rose 1.1% week-to-week, according to the seasonally adjusted index of the Mortgage Bankers Association.

The average contract rate on 30 year fixed rate mortgages with compliant loan balances ($ 510,400 or less) decreased from 2.90% to 2.85%, with credit points decreasing 20% ​​from 0.35 (including the origination fee ) decreased to 0.33 payment.

“US Treasury bond rates remained low last week, partly due to uncertainty about the prospect of additional pandemic-induced government incentives as well as concerns over the continued spike in Covid-19 cases across the country,” said Joel Kan , Associate Vice President of MBA President for Economic and Industrial Forecasting.

Home loan refinancing requests, the most sensitive to fluctuations in mortgage rates, rose 1% over the week but were 105% higher than last year. Last year, mortgage rates were 113 basis points higher at this point. Refinancing now would bring significant savings on their monthly payments to anyone who refinanced in the past year.

Home purchase mortgage applications grew 2% over the week and 26% annually. December is usually not a strong month for home sales, but demand continues to rise as Americans continue to work from home. They want more space, and some can now work from anywhere, giving them far more options when it comes to moving.

“Home purchase requests increased for the fourth time in five weeks as both conventional and government market segments grew,” Kan said. “Home purchase applications rose for the sixth consecutive year to their highest level since June – perhaps a sign that more first-time buyers are entering the market.”

First-time buyers faced strong competition for a seriously low supply at the entry level. Cash-intensive investors continue to pile up, and home builders aren’t building nearly enough cheap homes to meet demand. Property prices at the lower end are rising the fastest, leaving some potential buyers on the sidelines.