a for sale sign appears in front of a house on oak street in patchogue new york on may 17 2022 mortgage rates soared over 7 just a month ago but since then they have fallen more than half a percentage point still mortgage loan application volume decreased 08 last week compared with the previous week according to the mortgage bankers associations seasonally adjusted index the results also include an adjustment for the observance of the thanksgiving holiday the average contract interest rate for 30year fixedrate mortgages with conforming loan balances 647200 or less decreased to 649 from 667 with points remaining at 068 including the origination fee for loans with a 20 down payment the weakness continues to be in refinance demand which dropped 13 from the previous week and was 86 lower than the same week one year ago strange given that roughly 100000 more current borrowers could now benefit from a refinance with the latest rate drop according to black knight mortgage applications to purchase a home gained 4 from the previous week but demand was 41 lower than the same week one year ago sales of existing homes continue to drop while newly built home sales are benefiting from builder concessions specifically deals in which the builder buys down the mortgage rate the economy here and abroad is weakening which should lead to slower inflation and allow the fed to slow the pace of rate hikes purchase activity increased slightly after adjusting for the thanksgiving holiday but the decline in rates was still not enough to bring back refinance activity noted joel kan an mba economist the adjustablerate mortgage share of application activity increased slightly to 9 which is lower than the roughly 12 range a month ago when rates were higher the arm share however was about 3 at the start of this year when the 30year fixed rate hovered near a record low arms offer lower interest rates but higher risk mortgage rates havent moved much to start this week but by the end of the week that could change as the highly anticipated monthly employment report is set for release any unanticipated swing in either direction will have a direct effect on mortgage rates