A sign for sale shows the house in Washington, D.C., November 19, 2020 as “under contract.”
Saul Loeb | AFP | Getty Images
The sharp rise in mortgage interest rates over the past few weeks has had an impact on mortgage demand. According to the Mortgage Bankers Association’s season two integrated index, the total number of applications last week fell by about 7% compared to the previous week.
The average contract interest rate for 30-year fixed-rate mortgages with a favorable loan balance ($ 548,250 or less) increased from 3.10% to 3.14%, with payments rising for 0.34 to 0.34 (including origin fee) rising 20% after July. To the highest level.
Re-scheduled demand, particularly sensitive to weekly interest rate movements, fell 10% last week to a three-month low. The volume was 16% lower than the same week a year ago.
Joel Kahn, associate vice-president of the MBA in Economic and Industrial Forecasting, said:
Mortgage applications for home purchases fell 2% for the week and were down 13% from the same week a year ago. This was driven by the collapse of conventional loan applications. Demand for government loans, which are mostly used by low-income borrowers, has increased by 1%.
“But that still wasn’t enough to reduce the average balance of 10 to 4 410,000. With home-price appreciation and selling prices so high, appeals for higher balances, conventional loans still dominate the mix of activities.”
Rates fell slightly earlier this week, but then moved higher again on Tuesday. The bond market, which indicates daily rate movements, responds to economic data.
Matthew Graham, chief operating officer of Mortgage News Daily, said: “After a significant report in the services sector became stronger than expected, bonds continue to decline.” “When bonds lose enough space in the middle of the trading day, mortgage lenders occasionally make mid-day adjustments to their rate offers.”