Last week’s mortgage rates rose at the fastest pace in over a year, throwing cold water on already chilling demand.
Total mortgage applications were basically flat that week, up just 0.5%, according to the Seasonally Adjusted Index of the Mortgage Bankers Association.
The average contract interest rate for 30-year fixed rate mortgages with eligible loan balances ($ 548,250 or less) rose from 3.08% to 3.23%, and points rose 20% from 0.46 (including origination fees) to 0.48. did. payment. A year ago it was down 34 basis points, but its annual comparison is steadily shrinking. Last fall, mortgage rates fell 100 basis points compared to the previous year.
Joel Kang, MBA’s Vice President of Economic and Industrial Forecasting, said: “The 30-year fixed rate has reached its highest level, experiencing the largest weekly rise in almost a year. [level] Since July 2020. “
Mortgage refinancing applications, which are most sensitive to weekly interest rate fluctuations, managed to make a profit of 0.1% that week, just 7% higher than a year ago. By comparison, refinancing volume in mid-December increased by more than 100% year-on-year.
The refinancing share of mortgage activity fell from 68.5% last week to 67.5% for all applications.
Mortgage applications to buy a home increased by 2% in a week, up just 1% from a year ago. Homebuyers are facing an expensive and lean home market as homebuilders struggle to meet demand and potential sellers withdraw. As mortgage rates rise, affordability becomes even weaker, but it seems that more and more first-time buyers are coming.
Mr. Suga said, “The housing market is entering the spring buying season when demand is strong. With the increase in government applications (probably the first purchaser), the number of purchase applications has increased, and the average loan for the first time in 6 weeks The amount has been reduced. “
Mortgage rates have receded slightly to start this week as yields on 10-year Treasuries have fallen. Mortgage rates roughly follow their yields.
“In the last two decades, there have been six months when mortgage rates have risen by at least 50 basis points, one of which was February 2021,” said Matthew Graham, COO of Mortgage News Daily. “In other words, it was a really bad month for interest rates. In fact, it makes more and more sense to look for some relief just because things don’t tend to last that long.”
Mortgage application demand stagnates when interest rates soar
https://www.cnbc.com/2021/03/03/mortgage-application-demand-stalls-as-interest-rates-surge-.html Mortgage application demand stagnates when interest rates soar