Rising mortgage rates have slashed demand for mortgages, causing buyers to reconsider buying a home.
Mortgage applications for home purchases fell 6% in the week ending Feb. 24 from the previous week. Mortgage Bankers Associationseasonally adjusted index of . Demand for mortgages also fell 44% year-over-year and is now at his lowest level in 28 years.
“After a brief resurgence in application activity in January when mortgage rates fell to 6.2%, applications fell for the third straight week as mortgage rates rose 50 basis points over the past month.” Joel Kan said. Vice President and Deputy Chief Economist at MBA.
Data on inflation, employment and economic activity showed that inflation may not fall as quickly as expected, putting upward pressure on interest rates, Kang explained.
The average contract rate for 30-year fixed-rate mortgages with loan balances under $726,200 rose to 6.71% from 6.62% the week before. The average contracted interest rate for his 30-year fixed-rate mortgages with jumbo loan balances over his $726,200 remained at 6.44% for the same period.
and housing wireOptimal Blue’s data showed a rate of 6.681% on Tuesday, up from 6.638% last week, according to the Rate Center.and Mortgage Daily Newsthe rate was even higher at 6.85%.
In a recent column, Logan Motashami said some buyers who recently applied for mortgages may hold off until interest rates cool again.
“I call this interest rate lock risk, and some buyers either don’t qualify or don’t want to keep buying until interest rates fall again. It’s going to hurt more because some of the buyers may not be able to participate,” said Mohtashami.
Mortgage originators had hoped the housing market would heat up in the spring as interest rates fell in January, but hopes are fading.
“It’s like we got off to a bad start,” says branch manager Dan Monson cente mortgage Said.
“Maybe a month ago someone tapped it. All of a sudden there was leads, referrals and action. said Monson.
Refinancing demand has also fallen this week, down 6% week-on-week, with refinancing demand down 74% compared to the same week last year.
“Refinancing applications account for less than one-third of all applications and are more than 70% behind last year’s pace as most homeowners are already strapped to low interest rates,” said Kan. increase.
Mortgage refinancing rates fell to 31.8% from the previous week’s 32.5%. USDA’s share of total volume also decreased from 0.6% to 0.5% over the same period.
The share of variable rate mortgage (ARM) activity rose to 8.1% of total volume. FHA’s share of total filings remained unchanged at 12.1%.
However, not all are pessimistic. We look forward to even greater success in the second half.
MBA expects 30-year fixed rate mortgages to fall to 6.1% in Q2, 5.7% in Q3 and 5.3% in Q4.
“We’re starting this year slowly, but I think we’ll end with pre-pandemic numbers,” Monson said. “last year [production] front end loaded [and] It will be the backend lord this year. “
