The mortgage demand is falling, but poor applications are getting a recent peak
“The mortgage interest rate was moved higher last week, so that the pace of the mortgage application activity abruptly delayed with the refinancing volume that decreases 12% and the purchase volume decreased by 5% for the week,” said Mike Fratantoni, Senior Vice President and Chief Economist of MBA. “Purchasing volume remains almost 13% above the level of last year, but economic uncertainty and volatility in rates are likely to hesitate at least a few potential buyers to continue with a purchase.
“A remarkable change last week was the full percentage of an increase in arm share,” he added. “Given the leap in the rates, more borrowers opt for the lower initial rates that are delivered with an arm, with initial fixed rates closer to 6% in our survey last week.”
The Refinancing Index of the MBA fell by 12% compared to the previous week, although it was 68% higher than the same week a year ago. The refinancing share of the mortgage activity also decreased, accounting for 41.3% of the total applications (compared to 43.6% last week).
The seasonal purchasing index fell by 5% of a week earlier. The non-adjusted purchase index had fallen 4% week during the week and was 13% higher on an annual basis.
Per product type, the Federal Housing Administration (FHFA) The share of the total applications fell from 16.3% to 15.8% during the week. The US Department of Veterans Affairs (VA) The share of the applications fell from 15.7% to 13.7%, while the US Department of Agriculture (USDA) Share was unchanged at 0.5%.
The average contract interest for 30-year mortgages with a fixed interest rates increased to 6.81%, an increase of 6.61%a week earlier, while the rates for 30 years of fixed mortgages with Jumbo loan balances rose with 19 basic points (BPS) to 6.84%.
FHA mortgages saw the rates rise by 19 BPS to 6.52%, while 15-year-old fixed rates have risen by 18 BPS to 6.11%. The average percentage for 5/1 poor increased from 5.93% to 6.11%.
