A residential real estate sale sign can be seen in Washington, DC
Brendan Smialowski | AFP | Getty Images
Mortgage rates rose last week for the third week in a row and reached the highest level since November. As a result, demand for mortgage applications fell 2.7% from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
The average contract rate for 30-year fixed-rate mortgages with a conforming loan balance ($766,550 or less) increased from 7.13% to 7.24%, while points increased from 0.65 to 0.66 (including the origination fee ) for loans with an interest rate decrease of 20%. payment.
Applications for home loan refinancing, which are the most sensitive to weekly interest rate movements, fell 6% this week and were 3% higher than the same week a year ago.
Applications for a mortgage to purchase a home fell by 1% this week and were 15% lower than in the same week a year ago. Now that house prices are rising along with interest rates, the purchasing power of potential buyers is suffering a double blow.
“Purchase applications fell as homebuyers postponed their purchasing decisions due to stretched affordability and low supply,” said Joel Kan, deputy chief economist at the MBA.
As often happens when affordability takes a hit, the share of adjustable-rate mortgage applications rose to 7.6% last week. ARMs offer lower rates and can be fixed for up to 10 years, although they are considered riskier.
Mortgage rates have fallen very slightly so far this week, but there isn’t much economic data to influence them. That will change next week when the all-important monthly employment report is published.