Mortgage interest rates rose again last week, causing homeowners and potential buyers to reduce borrowing.
According to the seasonally adjusted index of the Mortgage Bankers Association, the total number of mortgage applications fell 5.1% from the previous week.
The average contract interest rate (equal to or less than US$548,250) of eligible 30-year fixed-rate mortgages with loan balances increased from 3.33% to 3.36%, and for loans that fell by 20%, the average interest rate increased from 0.39 (including the start-up fee) to 0.43 paid.
As a result, housing loan refinancing applications, which are most sensitive to changes in weekly interest rates, dropped by 5% this week and 20% from the same period last year. This is the slowest rate since June last year.
MBA economist Joel Kan said: “Refinancing applications have declined for the fifth consecutive week, but loan activity in Virginia has increased.” In general, refinancing demand has declined, in the past 1
The number of mortgage applications for home purchases has fallen by 5% and is up 51% from a year ago. In the next few months, the annual comparison will be very large, as the pandemic shut down the economy last year and the real estate market almost completely stagnated last year. At the beginning of summer, it rebounded sharply.
Kan said: “The rapid economic recovery and the improvement in the job market are generating considerable demand for home purchases, but activity in recent weeks has been constrained by faster housing price growth and extremely low inventories.”
After refusing to break the recent highs, mortgage interest rates fell this week. For home buyers in the coming weeks, this may bode well.
“Mortgage News Daily” chief operating officer Matthew Graham (Matthew Graham) wrote: “The evidence of a supporting shift in the interest rate environment is starting to increase. Depressed or short-lived, it is true, but almost everything is better than the first quarter of 2021. Sideways at the current level alone would be a huge victory. “