Mortgage demand rises for first time in six weeks

Mortgage applications increased last week for the first time in six weeks, despite rising interest rates, according to the Mortgage Bankers Association.

Sharp fluctuations in rates and uncertainty in the general direction of the housing market are likely.

The average contractual interest rate for 30-year fixed-rate mortgages with a qualifying loan balance ($647,200 or less) increased to 6.25% from 6.01%, with the interest rate down to 0.71 from 0. 76 (including issuance fee) for loans with 20% down. payment.

“Treasury bond yields continued to rise last week ahead of the Federal Reserve’s September meeting, where they are expected to announce – in their efforts to slow inflation – another significant hike in short-term rates,” said Joel Kahn, an MBA economist. , in release.

Mortgage refinancing applications, which are usually very sensitive to large rate swings, actually rose 10% in a week, although they were still 83% lower than in the same week a year ago. In part, this may have been due to the holiday adjustment for the previous week. It could also be that the very few remaining borrowers who could benefit from refinancing finally stepped over the barrier, seeing that rates could rise even higher for the foreseeable future.

“The weekly gain in filings, despite stronger numbers, highlights overall volatility right now, as well as Labor Day-adjusted results from the previous week,” Kan said.

Mortgage applications to buy a home rose 1% in a week but were 30% lower than the same week a year ago. Buyers are now seeing less competition in today’s pricey market, so some might jump in when they get the chance. Homes have been on the market longer and sellers are much more willing to negotiate than even three months ago.

However, prices haven’t come down that much yet, and with rates as high as they are now, affordability is historically weak. The small weekly increase in mortgage demand doesn’t really reflect the sharp correction taking place in home buying.

Mortgage News Daily reported that mortgage rates jumped even higher this week. It showed that the average rate on 30-year bonds was fixed just below 6.5% on Tuesday, ahead of the much-anticipated Federal Reserve meeting on Wednesday. Investors will be watching for comments not about the current rate hike, but about what could be ahead.

“Forecasts will exacerbate any volatility that we may have already seen in connection with the decision to raise the rate. Besides, [Fed Chairman Jerome] A Powell press conference can always add additional volatility,” wrote Matthew Graham, COO of Mortgage News Daily.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button