A ‘For Sale’ sign hangs in front of a home on June 21, 2022 in Miami, Florida.
Joe Riddle | Getty Images
After declining for five straight weeks, mortgage rates jumped last week, denting mortgage demand.
Total mortgage application volume last week decreased 7.7%, compared to 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 matching loan balances ($726,200 or less) rose to 6.39% from 6.18%, with the score rising to 0.70 from 0.64 (including origination fees) for loans of 20%. low premium. The rate was 4.05% one year ago.
“Mortgage rates rose across the board last week, driven by market expectations that inflation will persist, requiring the Fed to keep monetary policy constrained for longer,” said Joel Kahn, MBA vice president and deputy chief economist.
Home loan refinance applications fell 13% during the week and were 76% lower than the same week a year ago. At the current rate, 100,000 fewer borrowers could benefit from a refinance than in just one week, according to data from Black Knight. A year ago, with mortgage rates of 4.05%, there were just under 4 million candidates for refinancing.
Mortgage applications for a home fell 6% for the week and were 43% lower than in the same week a year ago. Real estate agents across the country have reported a jump in buyer demand in the past few weeks, which could signal an early start to the historically busy spring market.
“I actually thought, ‘Oh my God, this is amazing. Look how fast it turned into a dime,'” said Dana Rice, a real estate agent for Compass, who was running a packed open house in Bethesda, Maryland, on Saturday. “We went from having no offers and no one coming to open houses, and everything I’ve launched in the last couple of weeks has had multiple offers.”
However, there is an abnormally high level of all cash buyers in the market. Peter Fang is one of them. It was in the open house.
“I am very surprised to see so many cash offers in the market. I thought I would be in a much better position but the competition is still there,” Fang said.
Mortgage rates continued to rise this week after a government report showed inflation was higher than expected in January.