Jeff Greenberg Universal Images Group | Getty Images
Mortgage rates rose significantly last week, reducing overall demand for mortgages.
Total application volume fell 0.7% from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. It was the first decrease in five weeks.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) increased from 6.67% to 6.75%, with points remaining at 0.66 (including origination fees) for loans with 20% down payments. . This rate was just 8 basis points higher than the same week a year ago.
The driving force behind the decline was demand for refinancing. Although it fell 3% for the week, it was still 41% higher than the same week last year. Mortgage rates aren’t that much lower now than they were a year ago, but the number of refinances in general is so low that even a small movement can make a big comparison.
The number of applications for mortgages to buy homes increased by 1% for the week, and by 6% compared to the same week last year.
“Purchasing activity increased on a weekly and annual basis this week due to traditional and VA purchase applications, supported by gradually improving inventory conditions and a more positive economic and job market,” said Joel Kang. and buyers remained active in the purchasing market.” , MBA’s Vice President and Deputy Chief Economist.
Mortgage rates have remained roughly flat this week as the market awaits Wednesday’s Federal Reserve meeting, according to a separate Mortgage News Daily survey. A rate cut is expected, but some analysts believe it may be the last one for a while.
Matthew Graham, chief operating officer at Mortgage News Daily, said: “The market is betting on the Fed cutting rates and the dotplot (a rate outlook survey updated quarterly and closely monitored by bonds) showing interest rates higher than they were in September. “I know what the trajectory is.” . “What we don’t know is how bleak the dot plot is or whether the market will accept how hawkish Powell is.”
