Mortgage rates drop for the first time in 2 months, but demand still falls further

Mortgage demand took another leg lower, despite a brief respite from rising interest rates. Total mortgage application volume fell 5.3% last week compared with the previous week, according to the Mortgage Bankers Association's seasonally adjusted index. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $832,750 or less, decreased last week to 7.41% from 7.50%, with points decreasing to 0.75 from 0.83 (including the origination fee, for loans with a 20% down payment. "Mortgage rates decreased for the first time in over two months," said Joel Kan, an MBA economist in a release.