A residential real estate for sale sign is seen in Washington, DC
Brendan Smialowski | AFP | Getty Images
Mortgage rates rose for the third straight week last week, reaching their highest level since November. As a result, demand for mortgage applications fell 2.7% from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) increased from 7.13% to 7.24%, with points increasing from 0, 65 to 0.66 (including origination fees) for loans with a 20% down payment. payment.
Requests to refinance a home loan, which are most sensitive to weekly changes in interest rates, fell 6% for the week and were 3% higher than the same week a year ago.
Mortgage applications to purchase a home fell 1% for the week and were 15% lower than the same week a year ago. As house prices rise alongside interest rates, the purchasing power of potential buyers takes a double whammy.
“Purchasing demands declined as buyers delayed their purchasing decisions due to affordability challenges and low supply,” said Joel Kan, MBA deputy chief economist.
As often happens when affordability takes a hit, the share of applications for adjustable-rate mortgages increased last week to 7.6%. ARMs offer lower rates and can be fixed for up to 10 years, although they are considered riskier.
Mortgage rates have fallen very slightly so far this week, but little economic data is available to influence them. That will change next week, when the all-important monthly jobs report is released.
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