- The average contractual interest rate for 30-year fixed-rate mortgages with conforming loan balances — $726,200 or less — rose to 7.27% from 7.21%.
- Refinancing demand fell 5% during the week and was 31% lower than the same week a year ago.
- Home mortgage applications rose 1% week-over-week but were 27% lower than the same week a year ago.
A “For Sale” sign hangs in front of a home in San Mateo County, California, August 22, 2023.
Liu Guangwan | China News Service | Getty Images
High mortgage rates continue to negatively impact mortgage demand, especially for refinancing.
Total mortgage application volume fell 0.8% last week compared to 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 — $726,200 or less — rose to 7.27% from 7.21%, with points increasing to 0.72 from 0.69, including origination fees, for low-interest loans. By 20%. Premium.
Refinancing demand fell 5% during the week and was 31% lower than the same week a year ago. Refinancing’s share of mortgage activity fell to 29.1% of total applications from 30.0% the previous week. By comparison, at this time in 2020, when pandemic monetary policy interest rates were around 3%, the refinancing share of mortgage applications was 63%.
Home mortgage applications rose 1% week-over-week but were 27% lower than the same week a year ago. The share of adjustable-rate mortgages in total applications rose, indicating that potential buyers are using every tool at their disposal to lower their monthly payments. ARMs offer lower interest rates but are considered riskier because their rates are fixed for a shorter period.
“Mortgage applications fell for the seventh time in eight weeks, reaching their lowest level since 1996,” Joel Kahn, an economist with the Mortgage Bankers Association, said in a statement. “Given how high interest rates are right now, there is still minimal refinancing activity and low incentive for homeowners to buy and sell a new home at a higher price.”
Mortgage rates remained high to start this week, according to a separate survey by Mortgage News Daily, but that could change after the release of the monthly CPI on Wednesday.
“While it is always possible that big data will thread the needle and result in minimal movement, there is no doubt that any significant departure from expectations will rock the bond boat for better or worse,” Matthew Graham, chief operating officer at Mortgage News, wrote. Daily.
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