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    Mortgage rates finally reversed course, this week slipping to 3.05% — down from 3.12% the week prior.

    “The market volatility resulting from the COVID-19 Omicron variant is causing mortgage rates to decrease,” said Sam Khater, Freddie Mac’s chief economist. 

    The dip did little to inspire homebuyers though. According to the Mortgage Bankers Association, overall mortgage applications fell 0.6% for the week. Purchase activity dropped 6% compared to the week prior.

    “Both conventional and government purchase applications were down, while the average purchase loan increased for the second straight week to $416,200 — the second-highest amount ever,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Home price appreciation growth remains faster than historical averages and inventory, particularly for starter homes, continues to trail strong demand.”

    Homeowners, on the other hand, responded to the small drop in mortgage rates. According to MBA, applications to refinance a loan actually increased for the week by 2%. In all, refinances made up 65.2% of mortgages applications, a jump from the previous week’s 63.3%.

    More in mortgage & housing news

    • Existing home sales were up nearly 2% in November, according to the National Association of Realtors. The median price was up 15% over the year, clocking in at $353,900.
    • Only 1.67% of all mortgage loans are still in forbearance, according to MBA. That’s down from 2.06% and amounts to just 835,000 homeowners nationwide.
    • According to a new report from Redfin, homeowners gained $9 trillion in equity this year. Rural homes, in particular, saw huge gains in value, with a 46.2% jump over the year. 
    • Home flips accounted for nearly 6% of all sales in the third quarter of this year, up slightly from Q2. Profits, however, moved in the opposite direction. According to ATTOM Data Solutions, home flipping profit margins are now at their lowest point in a decade, with the average investor bringing in just a 32.3% ROI — down from 43.8% a year ago.

    This week in mortgage rates

    Mortgage rates dropped on all mortgage products this week. Here’s how rates looked for each loan type:

    Make sure to check back here next week for the latest mortgage rates and news.

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