Thursday, November 7, 2024 at a home in Discovery Bay, California, USA. US mortgage rates rose to their highest level since July.
David Paul Morris | Bloomberg | Getty Images
Mortgage rates continued to rise last week as investors weighed the future of the economy under President Trump. The mortgage market basically took a breather.
According to the Mortgage Bankers Association’s seasonally adjusted index, total application volume was essentially flat, increasing just 0.5% last week from the previous week. Although small, this increase marked the first increase in overall demand in seven weeks.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $766,550 or less, including origination fees for loans with a 20% down payment, decreased from 0.68 to 0.60 points and increased from 6.81% to 6.86% . .
“Mortgage rates continued to rise last week, driven by rising U.S. Treasury yields, as financial markets digest the expected impact of President Trump’s inauguration,” said Joel Kang, deputy chief economist at the Mortgage Bankers Association. ” he said. “The Fed’s 25 basis point rate cut was already expected, but it did little to move the market.”
The number of mortgage refinance applications, which are most sensitive to weekly interest rate changes, fell 2% for the week, the lowest level since May. However, it was up 43% compared to the same week a year ago. At that time last year, mortgage rates were 75 basis points higher.
The number of applications for mortgages to buy homes increased by 2% during the week, and by 1% compared to the same week last year. Homebuyers may be considering lower interest rates than last year, but they’re also seeing home prices rise. Meanwhile, the supply of homes for sale remains low.
Kang noted that applications for loans backed by the Federal Housing Administration and the U.S. Department of Veterans Affairs contributed to the increased purchasing activity, increasing by 3% and 9%, respectively.
“FHA mortgage rates bucked the overall trend and fell throughout this week, which likely helped some borrowers,” Kang said. “Traditional purchase applications also increased slightly.”
Mortgage interest rates rose this Tuesday. The bond market was closed on Monday for Veterans Day.
“The market continues to function through election-related volatility,” said Matthew Graham, chief operating officer of Mortgage News Daily. “This involves a complex set of considerations, some of which have to do with actual expectations for changes in fiscal policy over the next few years. Among the considerations are: Some can be as simple as going through the process of terminating (and resetting) a position in the run-up to an election. ”
