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Last week the mortgage rates rose to the highest level in eight months, leading to mixed demand for mortgages.
The average interest rate for 30-year fixed mortgages with conforming loans rose from 3.23% to 3.30%, the points dropped from 0.35 to 0.34 for loans with a 20% down payment. Last year around this time that rate was 30 basis points lower.
This lead to a fall in refinances demand by 2%. The volume dropped 26% from the same week last year. Of total applications compared to last week the refinance share of mortgage activity decreased from 63.3% to 62.2%.
MBA’s associate vice president of economic and industry forecasting, Joel Kan, said that the higher rates are further reducing the borrowers’ incentive to refinance.
Even while the purchase mortgage applications rose by 4% for the week they were 9% lower than the same time in 2020. the average loan size rose to its highest level in 3 weeks as home prices kept rising.
Since the beginning of this year new and, existing-home sales were at their strongest but first-time homebuyers getting nudged out.
Next week the Federal Reserve is expected to announce that it will taper its purchases of mortgage-backed bonds. Which will further push the rates higher.
Reference Source: CNBC
