Home News Wild swings in mortgage rates last week caused a rare surge in refinancing

Wild swings in mortgage rates last week caused a rare surge in refinancing

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The “Open House” sign for the Saratoga Homes Glendale Lakes Community Development in Arcola, Texas, Tuesday, July 12, 2022.

Mark Felix | Bloomberg | Bloomberg | Getty Images

Mortgage rates averaged higher again last week after falling at the end of July, but the day-to-day movements were volatile. The Mortgage Bankers Association’s seasonally adjusted index showed demand for mortgages was split, with refinancings up but applications from homebuyers down.

Average contractual interest rates for 30-year fixed-rate mortgages were in line with loan balances (under $647,200), rising from 5.43% to 5.47%, with points rising from 0.65 (including origination fees) to 0.80. did. payment. Weekly averages didn’t change much, but daily movements were more dramatic.

Another reading from the Mortgage News Daily showed that the average 30-year fixed rate rose 45 basis points early last week, fell 41 basis points on Thursday and then rose another 36 basis points. Mortgage interest rates rarely fluctuate this much.

This volatility may be behind the increase in refinancing, which has been steadily declining since the beginning of the year. These applications grew 4% in one week. Some may have wanted to take immediate advantage of the rate drop or get a lower offer from the week before, although refinancing would have cost him around 3%. 82% down from a year ago.

Mortgage applications to buy a home are less sensitive to weekly interest rate changes, down 1% this week and down 19% from a year ago.

Joel Kang, MBA’s Vice President of Economics and Industry Forecasts, said: “Activity has fallen in five of the last six weeks as buyers remain on the sidelines due to still-affordable pricing terms and doubts about the strength of the economy.”

Mortgage rates fell slightly earlier this week and are much less volatile than they were last week. That could change Wednesday due to the release of the latest consumer price index, which measures inflation in the economy. The bond market probably sees this the closest of all economic indicators.

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