Rising rates push mortgage applications down for fifth week

Rising rates push mortgage applications down for fifth week
Mortgage applications decreased for the fifth straight week – this time down 5.1%, according to the latest report from the Mortgage Bankers Association.

As has been the case for several weeks now, rising mortgage rates and low inventory are contributing to the slowdown in mortgage applications, said Joel Kan, MBA’s associate vice president of economic and industry forecasting.

“The rapidly recovering economy and improving job market is generating sizeable home-buying demand, but activity in recent weeks is constrained by quicker home-price growth and extremely low inventory,” Kan said.

Refinance mortgage applications declined for the fifth straight week. The refinance index decreased 5% from the previous week and was 20% lower than the same week one year ago. Kan said refinancing volume over the past 10 weeks is down by more than 30%.

For purchase mortgage applications, bidding wars and appraisal gaps are discouraging some buyers from looking at existing homes, while high costs for lumber and building materials are pushing up the price of new homes.

The 30-year fixed rate moved up to 3.6% after registering at 3.33% last week. And even though the unadjusted purchase index dropped 4% from the past week, it’s still sitting 51% higher than the same week last year.

The FHA share of total mortgage applications decreased to 10.2% from 11.3% from the week prior. However, the VA share of total mortgage applications increased to 13.38% from 10.3% the week prior.

Here is a more detailed breakdown of this week’s mortgage application data:

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) increased to 3.36% from 3.33%The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $548,250) increased to 3.41% from 3.34%The average contract interest rate for 30-year fixed-rate mortgages increased to 3.36% from 3.29% The average contract interest rate for 15-year fixed-rate mortgages increased to 2.74% from 2.71%The average contract interest rate for 5/1 ARMs increased to 2.92% from 2.85%
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Source: https://www.housingwire.com/rss