Home available for sale on May 22, 2024 in Austin, TX.
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After a brief dip through most of May, mortgage interest rates began rising again last week. This had an immediate impact on what had been a multi-week boost in mortgage demand.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) rose to 7.05% from 7.01%, with points rising to 0.63 from 0.60 (including origination fee) for 20% loans. . Premium.
It was the first increase in four weeks, and while it may not look like a huge move, it is an average, and interest rates fell back into the high 6% range before rising in the second half of the week.
As a result, total mortgage application volume fell 5.7% last week compared to the previous week, according to the Mortgage Bankers Association's seasonally adjusted index.
“Purchase and refinancing applications declined, pushing overall activity to the lowest level since early March,” Joel Kahn, an MBA economist, wrote in a press release. “Borrowers remain sensitive to small interest rate increases, which impacts the refinancing market and keeps purchase orders below year-ago levels.
Refinancing demand, which had been in a small recovery phase, fell 14% during the week but was still 12% higher than the same week a year ago.
Home mortgage applications fell 1% during the week and were 10% lower than the same week a year ago.
“There are still limited levels of existing homes for sale, and many buyers are struggling to find listings in the price range that meet their needs,” Kahn added.
Mortgage rates jumped sharply to start this week, rising 12 basis points just Tuesday, according to a separate survey by Mortgage News Daily. This came after comments on the direction of interest rates from Minneapolis Fed President Neel Kashkari. He told CNBC on Tuesday that he needs to see “several more months of positive inflation data, I think, to give me confidence that it's appropriate to pull back.”
