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mortgage Interest rates rose significantly last week, causing overall mortgage demand to fall.
Total applications fell 0.7% from the previous week, according to the Mortgage Bankers Association’s Seasonally Adjusted Index. This is the first decline in five weeks.
The average contract interest rate for 30-year fixed-rate mortgages with qualifying loan balances ($766,550 or less) increased to 6.75% from 6.67%, while loans with 20% down remained unchanged at 0.66 points (including origination fees). The rate was just 8 basis points higher than the same week a year ago.
The decline was driven by refinancing needs. It fell 3% this week but is still 41% higher than the same week a year ago. While mortgage rates aren’t that much lower now than they were a year ago, refinancing volumes are likely low overall, and any slight change can make a big difference in comparison.
Mortgage applications for home purchases increased 1% this week and were 6% higher than the same week a year ago.
Joel Kan writes: “Traditional and VA purchase applications drove weekly and annual increases in buying activity this week. Helped by gradually improving inventory conditions and a more positive outlook for the economy and job market, buyers continued to The buying market remains active.
Mortgage rates started the week essentially flat as the market awaits Wednesday’s Federal Reserve meeting, according to a separate Mortgage News Daily survey. A rate cut is expected, but some analysts say it could be the last for a while.
Matthew Graham, chief operating officer of Mortgage News Daily, wrote: “The market knows that the Fed will cut interest rates, and the dot plot (also known as the interest rate outlook survey, which is updated four times a year and is closely watched by bonds) will show a higher interest rate trajectory than in September. “We don’t know how pessimistic the market is willing to be on the dots or how hawkish Powell is. “
