On January 18, 2024, an “Open House” flag was hung in front of a house for sale in Alhambra, California.
Frederic J. Brown | Frederic J. Brown AFP | Getty Images
Mortgage rates rose again last week, boosting demand in the refinance and purchase markets. Total mortgage applications fell 10.8% from the previous week, according to the Mortgage Bankers Association’s Seasonally Adjusted Index.
The average contract interest rate for a 30-year fixed-rate mortgage with qualifying loan balances ($766,550 or less) increased from 6.73% to 6.81%, with points falling from 0.69 to 0.68 (including the origination fee) for loans with 20% down payment.
“Applications fell for a sixth consecutive week, purchase activity fell to its lowest level since mid-August, and refinancing activity fell to its lowest level since May,” MBA economist Joel Kan wrote in a release. the lowest level.
Home loan refinancing applications, which are most sensitive to weekly interest rate changes, fell 19% this week but were 48% higher than the same week a year ago. This time last year, 30-year fixed rates were 80 basis points higher.
“The average loan size for refinance applications dropped below $300,000, as borrowers with larger loans tend to be more sensitive to any given change in mortgage rates,” Kan added.
Mortgage applications for home purchases fell 5% this week and were only 2% higher than the same week a year ago. Homebuying activity has picked up over the past few months as supply has increased on the market and home prices have eased slightly. However, mortgage rates are once again deterring some buyers, while concerns about the economy and election may keep some on the sidelines for now.
Mortgage rates started the week essentially flat, which is sure to factor into near-term volatility regardless of the election outcome. In addition, the Federal Reserve will announce its latest interest rate decision on Thursday.
