Mortgage rates rose for the third consecutive week, causing demand from both current homeowners and potential homebuyers to drop. Total mortgage application volume fell 5.2% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $806,500 or less, increased last week to 6.37% from 6.34%, with points remaining unchanged at 0.62, including the origination fee, for loans with a 20% down payment. That is the highest level in four weeks.
Applications to refinance a home loan, which are most sensitive to short-term moves in rates, fell 7% for the week but were still 125% higher than the same week one year ago. Last year at this time, mortgage rates were about a half a percentage point higher, and refinance volume was unusually low. The large increase from a year ago is more a factor of the very small volumes overall.
Applications for a mortgage to purchase a home fell 2% for the week and were 26% higher than the same week one year ago. Purchase demand has hovered around the same level for several months, regardless of interest rate moves.
