Declining

mortgage
rates
in
August
provided
some
relief
for
U.S.
homebuyers
and
made
it
the
most
affordable
month
since
February. 

Of
the
2.5
million
“in-the-money“
mortgage
holders
as
of
Aug.
22,
more
than
60%
took
out
their
mortgages
in
the
past
two
years,
including
850,000
in
2023
and
560,000
this
year.
The
average
highly
qualified
candidate
who
took
out
a
mortgage
within
the
past
two
years
could
save
$264
per
month
by
refinancing
at
today’s
prevailing
rate,
according
to
the
newest

Mortgage
Monitor
report
released
Wednesday
by


Intercontinental
Exchange
(ICE).

While
purchase

mortgage
demand
has
recently
seen
a
couple
of
its
best
weeks
since
mid-March,
the
rise
was
muted
compared
to
early
2023
and
2024
when
rates
fell
to
similar
levels.

“When
it
comes
to
affordability,
as
always,
context
is
important:
it
still
takes
10
percentage
points
more
of
the
median
income
to
buy
the
average
house
than
it
has
on
average
over
the
last
30
years,”
Andy
Walden,
vice
president
of
research
and
analysis
at
ICE,
said
in
the
report.

”Our
own
ICE
Market
Trends
data
shows
that
prospective
homebuyers
are
also
facing
record
high
down
payments
and
credit
scores
among
recent
purchase
mortgages,”
he
added.
”Affordability
is
still
very
much
a
challenge
and
that
is
likely
to
continue
for
the
foreseeable
future,
but
August’s
improvement
is
certainly
welcome
progress.”

The
average
down
payment
on
mortgaged
home
purchases
hit
a
record
$91,600
in
July,
up
from
$84,300
at
the
same
time
last
year,
ICE
reported.
This
figure
is
up
from
$51,100
in
July
2019,
before
the
post-pandemic
surge
in
home
prices.

With
mortgage
rates
dipping
below
6.5%
in
the
first
week
of
August,
the
number
of
highly
qualified
refinance
candidates
more
than
doubled
from
just
a
few
weeks
earlier.

As
of
Aug.
22,
about
2.5
million
borrowers
were
in
the
money
for
a
refinance.
Of
this
group,
900,000
were
considered
highly
qualified,
meaning
they
held
at
least
20%
equity
in
their
homes,
had
credit
scores
of
at
least
720
and
could
save
at
least
75
basis
points
through
a
refinance.

These
borrowers
were
quick
to
pounce
on
the
downtick
in
rates.
They
pushed
refinance-related
rate
locks
to
their
highest
levels
in
more
than
two
years,
up
about
150%
in
a
two-week
period.

Rate-and-term
refis
drove
roughly
half
of
the
refi
activity
amid
falling
rates,
while
cash-out
activity
increased
only
marginally.

Growing
inventory
and
continuing
soft
demand
led

home
prices
to
cool
further
in
July,
ICE
reported,
bringing
the
annual
appreciation
rate
down
to
3.6%
in
July
compared
to
4.1%
in
June.

On
a
seasonally
adjusted
basis,
prices
rose
by
0.19%
from
June
to
July,
equivalent
to
a
seasonally
adjusted
annualized
rate
of
2.3%.
ICE
suggests
potential
further
slowing
in
the
annual
growth
rate
over
the
next
few
months.

If
the
current
pace
of
seasonally
adjusted
gains
were
to
continue,
it
would
result
in
annual
home
price
growth
cooling
to
a
range
of
3%
to
3.5%
over
the
next
couple
of
months.
Growth
is
likely
to
catch
a
modest
tailwind
in
the
fourth
quarter
due
to
softer
data
from
late
2023.

“That
said,
purchase
applications
and
rate
locks
will
be
worth
watching
closely
in
coming
weeks
to
see
how
borrowers
react
to
the
modest
improvement
in
rates
and
home
affordability
we’ve
seen
in
recent
weeks,”
according
to
the
report. 

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