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High mortgage rates continue to impact demand from current homeowners and potential homebuyers.
Total mortgage application volume fell 5.6% last week compared to the previous week, according to the Mortgage Bankers Association's seasonally adjusted index. An additional adjustment has been made to account for the Presidents Day holiday.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 7.04% from 7.06%, with points increasing to 0.67 from 0.66 (including origination fees) for low-interest loans. By 20%. Premium. The rate was about a quarter of a percentage point higher than it was one year ago.
As a result, home loan refinancing applications were 7% lower than the previous week and were 1% lower than the same week one year ago.
“Rising interest rates in recent weeks have brought activity to a standstill, and last week they fell even further for those seeking to refinance FHA and VA loans,” Mike Fratantoni, MBA's chief economist, said in a press release.
FHA and VA loans are generally used by low-income borrowers because they have lower down payment requirements.
Home mortgage applications fell 5% during the week and were 12% lower than the same week one year ago.
However, Fratantoni noted that mortgage demand from buyers eyeing newly built homes jumped 19% year over year in January.
“This disparity continues to highlight how a lack of existing inventory is the main impediment to increases in purchase volume. However, mortgage rates above 7% are certainly not helping,” he added. Prices were in the 6% range throughout January.
Mortgage rates rose again to start this week, according to a separate survey by Mortgage News Daily. The 30-year fixed rate now matches the highest level since early December 2023.
“There were no interesting or obvious catalysts for this move, nor do we expect there to be when it comes to the level of volatility we've seen on almost any day over the past two weeks,” Matthew Graham, chief operating officer of Mortgage News Daily, wrote. .a
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