A for sale sign is posted outside a home for sale on August 16, 2024 in Los Angeles, California.
Patrick T. Fallon | AFP | Getty Images
The sudden rise in mortgage rates has reduced weekly demand from both potential homebuyers and current homeowners. Total mortgage applications fell 5.1% last week 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 of $766,550 or less increased from 0.61 to 0.62 points, including loan origination fees, which fell 20%, and from 6.14% to 6.36%. . payment. This was the highest level since August.
“Mortgage rates rose after last week’s strong economic indicators, including the September jobs report,” said Mike Fratantoni, chief economist at the Mortgage Bankers Association.
Mortgage refinance applications, which had been surging for months, fell 9% this week, but were still up 159% from the same week a year ago. At this time last year, mortgage rates were 131 basis points higher.
“Refinancings of conventional loans, which tend to have larger balances than government loans and are more sensitive to certain changes in mortgage rates, fell significantly this week,” Fratantoni said.
The number of applications for mortgages to buy homes was almost flat this week, down 0.1% from the previous week. Purchase demand increased by 8% compared to the same week last year. Mortgage rates are lower than they were a year ago, but home prices are rising. Inventory has improved, but it’s still not enough to sell in a more affordable market.
Mortgage rates rose significantly last Friday following the release of better-than-expected monthly employment data, according to a separate Mortgage News Daily poll. Interest rates continued to rise on Monday, with the average for a 30-year fixed-rate mortgage now at 6.62%. Interest rates were flat on Tuesday.
“The worst may be over in terms of rapid increases, but new data is needed to put convincing downward pressure on rates,” said Matthew Graham, chief operating officer at Mortgage News Daily. ” he said.