Home News Mortgage demand drops further as interest rates shoot back to June high

Mortgage demand drops further as interest rates shoot back to June high

by admin
0 comment

GP: Homes For Sale

Brittany Murray via Getty Images | Media Newsgroups | Getty Images

In June, the average 30-year fixed interest rate briefly exceeded 6%. Interest rates were pulled back he July and he August but the damage was already done. Now, interest rates are pushing him above 6% again, further dampening demand for already-struggled mortgages.

According to the Mortgage Bankers Association, the average contract rate for 30-year fixed-rate mortgages with matching loan balances (under $647,200) rose to 5.94% from 5.80% last week. That’s a weekly average, but a separate Mortgage News Daily survey found that there were a few days when interest rates were above his 6% mark.

“Mortgage rates rose last week as markets continued to reassess the economic outlook and the direction of monetary policy, short-term rates rose, and expectations that they would continue to rise over the longer term,” said Mike Fratantoni. ‘ said. MBA Senior Vice President and Chief Economist.

As a result, mortgage applications aimed at refinancing mortgages fell another 1% in the week, and 83% less than the same week a year ago. Mortgage rates were just under 3% a year ago for him and were at record lows for much of 2021, so he’s still refinancing to far lower rates than are currently available. Very few people don’t.

Mortgage applications to buy a home were down 1% that week, down 23% from the same week a year ago. Given today’s higher interest rates, a person buying a $400,000 home would be paying nearly $700 more per month than a year ago.

“Recent economic data is likely to prevent a significant decline in mortgage rates in the short term, but the strong job market shown in August data should support housing demand,” Fratantoni said. said, adding: “We are not seeing any signs of a recovery in purchase requests.” However, a strong job market and rising housing inventories should ultimately lead to increased buying activity. ”

Mortgage rates rise further this week as investors await numerous speeches by members of the Federal Reserve that could give more insight into how big the next rate hike will be. Did. Rising mortgage rates have already pushed home prices down, but given the rise over the past few years, it will take a much more significant decline to fully restore affordability.

You may also like