Homes under construction on July 19, 2023 in Mundelein, Illinois.
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Mortgage interest rates rose last week for the first time in three weeks. As a result, total mortgage application volume fell 1.6% 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 ($766,550 or less) rose to 6.97% from 6.84%, with points falling to 0.64 from 0.65 (including origination fees) for lower-interest loans. By 20%. Premium. That was the weekly average, but another index from Mortgage News Daily, which looks at daily rates, showed the 30-year fixed mortgage was back above 7% last Thursday.
“Mortgage rates rose last week as incoming data showed inflation remains higher than expected, raising concerns about the timing and extent to which the Fed may be able to cut interest rates,” said Joel Kahn, MBA vice president and head of the Department of Business Administration. Federal funds this year. Deputy Chief Economist.
Home loan refinance applications, which are most sensitive to weekly rate changes, were down 3% compared to the previous week and were also 3% lower than the same week one year ago.
Home mortgage applications fell 1% during the week and were 14% lower than the same week a year ago. Buying demand is not sensitive to small movements in interest rates. Demand is also faced with high prices and very limited supply.
“With housing supply falling and prices rising, the average loan size for purchase applications rose to the highest level since May 2022,” Kahn added.
Interest rates are now in the low 7% range, just below the 2024 cap set three weeks ago. This ceiling could remain in place or be broken on Wednesday with the Fed's latest interest rate announcement and the ensuing press conference with Fed Chair Jerome Powell.
“The market is already anticipating some unfriendly change this time around, but reality could easily differ from expectations. Whatever the case, mortgage rates are likely to take bigger steps, for better or worse,” Matthew Graham wrote. Chief Operating Officer at Mortgage News Daily.
