Mortgage rates rose again last week, prompting homeowners and potential buyers to give up loans.
The total volume of mortgage applications decreased by 5.1% compared to the previous week, according to the seasonally adjusted index of the Association of Mortgage Banks.
The average contractual interest rate for 30-year mortgages with compliant loan balances ($ 548,250 or less) increased to 3.36% from 3.33%, with points increasing to 0.43 from 0.39 (including the start-up fee) for loans with a 20% down payment.
As a result, home loan refinancing applications, which are most sensitive to weekly rate movements, fell by 5% for the week and were 20% lower than a year ago. This is the slowest pace since June last year.
“Refinancing applications fell for the fifth week in a row, but there was a gain in VA lending,” said Joel Kan, an MBA economist. “Overall, the demand for refinancing has fallen, with a volume in the last 10 weeks falling by more than 30%.”
Mortgage applications for the purchase of a home decreased by 5% for the week and were 51% higher than a year ago. This annual comparison will be very large for the next few months, as the real estate market froze almost completely last year at this time, when the pandemic stopped the economy. He returned dramatically in early summer.
“The rapidly recovering economy and improving job market are generating considerable demand for housing, but activity in recent weeks has been constrained by a faster rise in house prices and an extremely low stock,” Kan said.
Mortgage rates fell this week after refusing to exceed recent highs. This could bode well for home buyers in the coming weeks.
“Evidence for a change in support for the tariff environment is beginning to accumulate,” wrote Matthew Graham, chief operating officer of Mortgage News Daily. “The change could be disappointing or short-lived, true, but almost anything is better than the first quarter of 2021. Simply shifting sideways to current levels would be a big win.”