After eight straight weekly declines, mortgage rates in the US are close to achieving a five-handle. FHA rates are already there.

The MBA’s 30-year fixed index dropped to 6.13% over the week, down 2bps, Wednesday’s update showed.

The small decline brought the three-week drop to 30bps. The last increase was during the week to July 3.

Financing costs are now 177bps below the highs reached in October of last year, when Treasury yields peaked for the cycle.

Recall that the steady decline in rates was (solely) responsible for the first drop in a key affordability metric since the pandemic: The annual income needed to afford a typical US home with a 15% downpayment fell in August, even as it still suggested the “median” US family is nowhere close to being able to comfortably afford the median home.

Importantly, this is still a refi story for now. The MBA’s refi gauge notched another large gain in excess of 20%.

That helped push the MBA’s overall applications index to the highest in over two years.

“As a result of lower rates, WoW gains for both conventional and government refinance applications increased sharply,” MBA VP Joel Kan said Wednesday, noting that refi’s share of applications now stands at almost 56%. “While the level of refinance activity is still modest compared to prior refi waves, they now account for the majority of applications, given the seasonal slowdown in purchase activity,” Kan went on.

Do note: The purchase index rose just 1%. Buyers are apparently convinced that if they just wait around, rates will fall even further. That’s not a bad bet, but then again, at least some of the Fed’s forthcoming rate cuts are already in the price. If you’re waiting on four-handle mortgages, you’re waiting on a recession, basically. If you’re waiting on three-handle mortgages, you’re waiting on a crisis, in which case you won’t be in the market anymore because you won’t have a job.

I don’t know what to tell you. Rates are “low.” Or lower. And prices don’t seem especially inclined to fall. So, maybe go get you a house. “They are so choice. If you have the means, I highly recommend picking one up.” (Not investment advice.)