Weekly mortgage demand rises 11% as interest rates rise

Mortgage rates rose again last week, drawing demand from both the refinance and purchase markets. The total amount of mortgage applications fell 10.8% compared to the previous week, according to the Realkreditforeningen’s seasonally adjusted index.

The average contract rate for 30-year fixed-rate mortgages with conforming loan balances — $766,550 or less — rose to 6.81% from 6.73%, with points falling to 0.68 from 0.69, including the origination fee, for loans with a decrease of 20%. payment.

“Applications fell for the sixth straight week, with purchasing activity falling to the lowest level since mid-August and refinancing activity falling to the lowest level since May,” Joel Kan, an MBA economist, wrote in a note.

Home loan refinance applications, which are most sensitive to weekly interest rate movements, fell 19% for the week but were 48% higher than the same week a year ago. Last year at this time, the 30-year fixed rate was 80 basis points higher.

“The average loan size on a refinance application fell below $300,000, as borrowers with larger loans tend to be more sensitive to any given change in mortgage rates,” Kan added.

Applications for a mortgage to buy a home fell 5% for the week and were only 2% higher than the same week a year ago. Home buying activity has picked up over the past few months as more supply comes on the market and house prices fall slightly. However, mortgage rates are pricing out some buyers again, and worries about the economy and the election may have some sitting on the sidelines right now.

Mortgage rates were largely flat to start this week, and regardless of the results or lack of results of the election, will certainly play into the recent volatility. In addition, the Federal Reserve will announce its latest interest rate decision on Thursday.