Short roller coaster rides for mortgage fees have caused yet another swing in demand. After falling to its lowest level in three years two weeks ago, the fee shot again.
As a result, total mortgage applications fell 12.7% last week compared to last week, according to the Mortgage Bankers Association’s Seasonal Adjustment Index. The drop was driven primarily by refinanced pullbacks.
Refinance applications fell 21% in a week, 16% higher than the same week a year ago. This is despite mortgage interest rates being 32 basis points higher than last week. The refinance share of mortgage activities fell from 60% last week to 55% of total applications.
The average contract rate for a 30-year fixed-rate mortgage with conforming loan balances rose from 6.34% to 6.46%, below $806,500, with points rising to 0.61 including the origin fee for a 20% down payment loan.
“Mortgage rates have risen to the highest level in three weeks due to higher Treasury yields with stronger economic data than expected,” said Joel Kang, vice president and vice-chief economist at MBA.
Refinance activities were pulled back for all loan types, including a 22% decrease in traditional refinancing and a 27% decrease in VA refinancing. The average refinance loan size has dropped to $380,100 from $461,300 two weeks ago.
Mortgage applications to buy mortgages fell 1% in a week, 16% higher than the same week a year ago. This comes after three consecutive weeks of profit.
“The strength of the purchase market is influenced by other factors such as broader economic conditions, job market health and housing inventory,” Kan said.
A recent report by the National Association of Realtors shows that home stocks in August fell for the first time since the beginning of this year. Homes have been on the market for longer than they are now, maintaining a higher supply than a year ago, but more sellers are beginning to abolish their property. Other potential sellers are choosing to wait for a better market.
Mortgage fees have not moved at all earlier this week. The forecast was that the monthly employment report could move more decisively on the Friday when it was released, but the government closures are now curbing it.
