A residential real estate for sale sign appears in Washington, D.C
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% compared to the previous week, according to the seasonally adjusted Mortgage Bankers Association index.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) rose to 7.24% from 7.13%, with points increasing to 0.66 from 0.65 (including origination fee) for 20% loans. . Premium.
Home loan refinancing applications, which are most sensitive to weekly movements in interest rates, fell 6% during the week and were 3% higher than the same week one year ago.
Home mortgage applications fell 1% during the week and were 15% lower than the same week one year ago. As home prices rise along with interest rates, the purchasing power of potential buyers is hit with a double whammy.
“Purchase orders declined as homebuyers delayed making purchasing decisions due to affordability pressures and low supply,” said Joel Kahn, MBA's deputy chief economist.
As often happens when affordability is affected, the share of adjustable-rate mortgage applications rose last week to 7.6%. ARMs offer lower rates and can be locked in for up to 10 years, although they are considered riskier.
Mortgage rates have fallen very slightly so far this week, but there hasn't been much economic data to influence them. That will change next week, when the all-important monthly employment report is released.
