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 interest rates rose for the fourth consecutive week last week. This further reduced demand for mortgages, which was already very weak. Total mortgage application volume fell 3.7% compared to the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Additional adjustments were made in preparation for the year-end and New Year holidays.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) increases from 6.97% to 6.99%, and points decrease from 0.72 (including origination fees) to 0.68 for loans with a 20% decline. did. payment. This is the highest level since July 2024.
The number of mortgage refinance applications increased by 2% from the previous week, but decreased by 6% from the same week last year. Interest rates are now 18 basis points higher than they were a year ago. In terms of weekly gains, the percentages are more skewed than normal because the volume of refinances is currently very low.
The number of applications for mortgages to buy homes fell by 7% during the week, and by 15% compared to the same week last year. There is currently a significantly higher supply of homes for sale than there was last January, but rising interest rates and soaring home prices are clearly deterring buyers.
“Purchase applications declined for both conventional and government loans, falling to the slowest weekly pace since February 2024,” said Joel Kang, MBA vice provost and deputy chief economist. “While refinance applications increased despite rising interest rates, this increase is relative to recent lows and is entirely due to an increase in VA refinances, which continues to fluctuate from week to week.”
Mortgage rates have been rising since the beginning of this week, and the 30-year fixed average was 7.14% on Tuesday, according to a separate Mortgage News Daily survey. Economic indicators were the driving factor.
Matthew Graham, MND’s chief operating officer, said: “Inflationary factors for ISM services have been one of the worst, but the increase in job openings hasn’t helped. The jump in yields was momentary, but “It was contained pretty well.”
Wednesday will see the release of Federal Reserve Board minutes, followed by the all-important monthly jobs report on Friday and more economic data. These will either keep interest rates on an upward trajectory or perhaps change their trend in the new year.
