The Mortgage Bankers association reports that mortgage rates rose again this week, to the highest in eight years. Mixed demand meant that mortgage rates did not change last week.
Average contract interest rates for 30-year fixed rate mortgages (with conforming loan balances of $5548,250 and less) have increased to 3.30%, from 3.23%. Points decreased to 0.34 from 0.35 for loans with 20% down payments. This rate was lower than one year earlier by 30 basis points.
Refinance demand dropped 2% from week to week seasonally. Volume for the week was 26 percent lower than that of one year earlier. Refinance activity has declined to 62.2% from 63.3% last week.
“The fifth consecutive decrease in refinance activity, to the slowest weekly rate since Jan 2020, was caused by an increase in rates. Joel Kan, MBA’s assistant vice president for economic and industry forecasting, stated in a statement that higher interest rates have lowered borrowers’ desire to refinance.
The week saw an increase in mortgage applications for home purchases of 4%, but they were still 9% below the previous week. Due to the rising prices of homes, most sales were in higher price brackets. The average loan size reached its highest point in three weeks.
Kan stated that while both existing and new-home sales were strong last month, first-time buyers make up a smaller share of the activity.
Get the most recent information about home prices S&P Case-ShillerThe national price increase was nearly 20%, although the annual growth, which has been increasing steadily over the past year, did NOT change from the prior month. It could mean that prices are cooling a bit due to higher mortgage rates.
The mortgage rate fell slightly this week to begin, but it is possible that there will be some relief before next week. It is expected that the Federal Reserve will announce on Wednesday that it will reduce its purchase of mortgage-backed securities. This should push rates higher.