You are currently viewing Mortgage Refinance Demand Falls After Rates Rose Higher

Mortgage Refinance Demand Falls After Rates Rose Higher

This post was originally published on this site

Share This Page

U.S. mortgage applications have decreased 6.8 percent from the week before, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending March 25.

The drop in applications comes as mortgage rates rose for another week, hitting current borrowers who were applying to refinance, but demand from homebuyers still remains steady.

Homebuyers are facing sky-high home prices and record-low supply, in addition to the rising mortgage rates.

“The Refinance Index decreased 15 percent from the previous week and was 60 percent lower than the same week one year ago,” said the MBA.

The 15 percent weekly drop in refinance applications is driving the downturn in overall mortgage demand.

The refinance index is at its lowest level since May 2019, while the higher mortgage rates have pushed the index down sharply over the last several months.

“The seasonally adjusted Purchase Index increased 1 percent from one week earlier. The unadjusted Purchase Index increased 1 percent compared with the previous week and was 10 percent lower than the same week one year ago,” the MBA said.

Meanwhile, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, at $647,200 or less, increased to 4.80 percent from 4.50 percent, with points decreasing to 0.56 from 0.59, including the origination fee, for 80 percent loan-to-value ratio (LTV) loans.

The highest annual average 30-year fixed-rate recorded was 16.63 percent back in 1981.

Before the pandemic hit economies around the world in 2020, the average interest rate for a 30-year fixed-rate mortgage for 2019 was 3.94 percent.

The average rate for 2021 was at 2.96 percent, the lowest annual average in 30 years.

“Mortgage rates jumped to their highest level in more than three years last week, as investors continue to price in the impact of a more restrictive monetary policy from the Federal Reserve. Not surprisingly, refinance application volume declined further, as fewer borrowers have an incentive to apply at rates that are significantly higher than a year ago,” said MBA’s Senior Vice President and Chief Economist Mike Fratantoni.

“Refinance application volume is now 60 percent

Subscribe By Email To Whichever Category You Wish

Or Browse Online By Following The Links Below...

..... (Read more by following the post link below)

Also See...