A sign is placed in front of a home for sale on August 07, 2024 in San Rafael, California.
Justin Sullivan | Getty Images
Mortgage interest rates rose last week for the third week in a row, reaching their highest level since August. This has resulted in declining demand from both current homeowners and potential homebuyers. Total mortgage application volume fell 17% 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 6.52% from 6.36%, with points rising to 0.65 from 0.62 (including origination fee) for 20% loans. Premium.
Refinancing demand, which is most sensitive to weekly interest rate movements, fell the most, falling 26% week-to-week. However, it was still 111% higher than the same week one year ago. Interest rates at this time last year were 118 basis points higher, so anyone who bought a home last year would likely benefit from refinancing now. The refinancing share of applications fell below 50% for the first time in more than a month.
Home mortgage applications fell 7% during the week but were 7% higher than the same week one year ago. More supply in the market now opens up opportunities for some buyers.
“Demand is fairly steady for potential first-time buyers,” housing expert Joel Kahn said. FHA applications were little changed despite the increase in rates, as some first-time homebuyers remained in the market due to improving inventory conditions. Residences. MBA Economics, in a statement.
Prices haven't done much to start this week, especially given the federal holiday on Monday. The recent rise in mortgage interest rates may have slowed the refinancing return, but homebuyers may be less concerned about interest rates today and more concerned about what the economy will look like in the coming months. Some say they are holding off on making such a large purchase until after the November election.
