Despite mortgage rates rising for the fourth consecutive week, mortgage demand increased last week after flatlining the previous week. The seasonally adjusted indicator from the Mortgage Bankers Association showed a 1.7% increase in total applications over the previous week.
For 30-year fixed-rate mortgages with conforming loan balances of $766,550 or less, the average contract interest rate went up from 6.86% to 6.90%, and points (including the origination fee) went up from 0.60 to 0.70 for loans with a 20% down payment. Since July, that was the highest level.
Mortgage applications to buy a home increased by 2% over the week, but they were 1% less than they were a year earlier. Both conventional and FHA loans were the main drivers of purchase demand; FHA buy applications increased by 7%.
Joel Kan, an MBA economist, stated in a release that some markets have seen a loosening of for-sale inventory, allowing some prospective buyers to benefit from rising availability and lower FHA rates that were marginally lower than the conforming 30-year fixed rate.
Home loan refinance applications increased 2% for the week and were 43% more than they were a year earlier. A 10% rise in VA applications drove demand.
A different study from Mortgage News Daily indicates that mortgage rates are essentially unchanged so far this week. They rose on Monday but plummeted on Tuesday as the U.S. officially revised its nuclear weapons policy and gave Ukraine permission to attack Russia with long-range missiles. As investors allegedly fled to safety, bond yields fell.
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As stated by Matthew Graham, chief operating officer at Mortgage News Daily, “the improvement in mortgage rates was completely underwhelming in comparison to the news headlines, probably because it’s far from the first such threat from Russia or because traders are skeptical that anyone wants to push any of the red buttons on the mutually assured destruction machine.”
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