Mortgage rates rose again and again last week, prompting homeowners and potential home buyers to withdraw on borrowing.
Overall, the application volume fell by 5.1% 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 similar loan balances ($ 548,250 or less) rose to 3.36% from 3.33%, with points rising to 0.43 from 0.39 (including the origination fee) for loans by 20% lower payment.
As a result, applications for refinancing a home loan, which is most sensitive to weekly interest rate changes, fell by 5% for the week and were 20% lower than a year ago. It is the slowest pace since June last year.
“Refinancing applications were rejected for the fifth week in a row, but there was a gain in VA lending activity,”
Mortgage applications to buy a home fell 5% for the week and were 51% higher than a year ago. The annual comparison will be very large in the next few months, as the housing market stopped almost completely last year at this time, when the pandemic closed the economy. It recovered dramatically in early summer.
“The rapidly recovering economy and the improved job market are creating significant demand for home purchases, but activity in recent weeks has been limited by faster growth in home prices and extremely low inventory,” Kan said.
Mortgage rates have moved lower this week after refusing to break through the recent highs. This could be good for home buyers in the coming weeks.
“Evidence of a supportive shift in the rate environment is beginning to rise,” wrote Matthew Graham, CEO of Mortgage News Daily. “The shift could be overwhelming or short-lived, true, but almost everything is better than the first quarter of 2021. Simply moving sideways at the current level would be a big win.”