A For Sale sign is displayed outside a home for sale on August 16, 2024 in Los Angeles, California.
Patrick T. Fallon | AFP | Getty Images
A sudden rise in mortgage interest rates has reduced weekly demand from both potential homebuyers and current homeowners. Total mortgage application volume fell 5.1% last week 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 conforming loan balances, $766,550 or less, rose to 6.36% from 6.14%, with points rising to 0.62 from 0.61, including origination fees, for low-interest loans. By 20%. Premium. This was the highest rate since August.
“Following strong economic data last week, including the September jobs report, mortgage rates rose,” said Mike Fratantoni, chief economist at the Mortgage Bankers Association.
Home loan refinancing applications, which had been rising for several months, fell 9% during the week but were still 159% higher than the same week one year ago. This time last year, mortgage rates were 131 basis points higher.
“Conventional loan refinancings, which tend to have larger balances than government loans and are therefore more responsive to a given change in mortgage rates, declined to a greater extent during the week,” Fratantoni said.
Home mortgage applications were flat during the week, down 0.1% from the previous week. Buying demand was 8% higher than in the same week one year ago. While mortgage rates are lower than they were a year ago, home prices are higher. Inventory has improved, but there isn't enough to sell at the affordable end of the market.
Mortgage rates rose sharply last Friday, following the release of a stronger-than-expected monthly employment report, according to a separate survey by Mortgage News Daily. It showed interest rates continuing to rise on Monday and now puts the average 30-year fixed-rate mortgage at 6.62%. Prices were flat on Tuesday.
“While the worst may be over for the rapid upward movement, it will take new data to put convincing downward pressure on interest rates,” said Matthew Graham, chief operating officer at Mortgage News Daily.
