“For sale” outside a home in Hercules, California, U.S., on Tuesday, May 31, 2022. Homebuyers face a worsening affordability situation with mortgage rates hovering around the highest levels in more than a decade.
David Paul Morris | Bloomberg | Getty Images
Mortgage rates rose slightly last week, for the second week in a row, but are still in the range that consumers seem to like.
Total mortgage application volume rose 9.9% last week compared to the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. An additional adjustment has been made for the New Year holidays.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) increased to 6.81% from 6.76%, with points remaining unchanged at 0.61 (including origination fee) for loans with a down payment. By 20%. . This rate peaked at about 8% in October, and has been in the 7% range for most of last year.
Home loan refinancing applications jumped 19% from the previous week and were 30% higher than the same week one year ago. The 30-year fixed rate was 39 basis points higher than a year ago, but 26 basis points lower than four weeks ago. While there aren’t many borrowers who can benefit from refinancing, given how low interest rates were just two years ago, those who can are rushing back into the market.
Mortgage applications to purchase a home rose 6% this week, but were still 16% lower than the same week one year ago. Buyers continue to face limited supply and overheated home prices.
“The increase in purchase and refinancing applications for both conventional and government loans is promising to start the year, but is likely due to some catch-up in activity after the holiday season and lower interest rates at the end of the year,” said Joel Kahn, MBA economist. “General”. In release. “Mortgage rates and applications have been volatile in recent weeks, and overall activity remains subdued.”
However, real estate agents say they are starting to see a new surge in demand from buyers who have been sidelined by the high price environment. More consumers also said they expect mortgage rates to fall further, according to a recent report from Fannie Mae.
Mortgage rates rose again slightly to start this week, but remained in the 6% range. The next big economic indicator comes on Thursday with the release of the monthly consumer price index. If the reading comes in higher than expected, indicating that more needs to be done to reduce inflation, mortgage interest rates could rise further.