The refinancing index was up 9.4% from the previous week and the seasonally adjusted purchase index was up 6.6% over the same period. Additionally, variable rate mortgages rose 13.9% and government loans rose 13% last week, according to MBA estimates.
Part of the increase was a result of the calendar, according to MBA.
Joel Kang, MBA’s vice president and deputy chief economist, said, “Even with higher interest rates, there was an increase in applications last week, but this was down to a very low level in two weeks, including the holiday week. in comparison to ‘the statement.
“Comparing the application index a year ago, purchase applications are still down 42% and refinancing activity is down 76%. Many borrowers are sitting on the sidelines as interest rates fall,” he said.
Who is jumping into the market?
Investor demand tends to increase at a time when most borrowers are waiting for lower interest rates, said Justin Fullmer, area manager in Idaho. future mortgagetold HousingWire.
“With less competition, more investors are entering the market to secure better deals,” Fulmer said.
Demand also increased as some borrowers realized that “when interest rates eventually come down, it will return to a seller’s market and buyers will lose a large amount of credit and other terms they can now negotiate,” Fulmer said.
At Future Mortgage, loan officers lock loans at a high mortgage interest rate of 5 to 6 on owner-occupied loans, mostly with the help of seller credit.
The average contractual rate for 30-year fixed-rate mortgages with matching loan balances ($726,200 or less) was 6.79% last week, up from 6.71% the week before and the highest since November 2022, according to an MBA study. .
Interest rates on jumbo loan balances ($726,200 and above) rose from 6.44% to 6.49% over the same period.
But another metric measures even higher rates. Average 30-year fixed-rate mortgages Wednesday afternoon, according to Mortgage News Daily was 7.01%.
“With interest rates expected to fall throughout 2023, we expect a surge in aggressive buyers and increased competition in the market,” Fulmer said. “Right now we believe rates have peaked and we expect rates to be in the low fives by the end of 2023.”
