Mortgage refinance demand continues, as interest rates rise again

Rising mortgage interest rates continue to take their toll on demand, especially in the refinance market. Total mortgage application volume fell 2.8% last week compared with 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 ($548,250 or less) increased to 3.20% from 3.16%, with points rising to 0.43 from 0.34 (including the origination fee) for loans with a 20% down payment.

However interest rates are still historically low and over 10,000,000 homeowners could still benefit from a refinance. If you have not yet lowered your rate, don’t hesitate and miss your opportunity to save!

Mortgage applications to purchase a home, which are less sensitive to weekly rate moves, rose 2% for the week but were 6% lower than the same week one year ago. Buyers appear to be coming back to the market after a brief lull. Builders reported strong buyer traffic in a sentiment report out this week from the National Association of Home Builders.

Purchase applications increased for both conventional and government loan segments, as housing demand continues to show resiliency at a time – late fall – when home buying activity typically slows. The second straight increase in purchase applications suggests that stronger sales activity may continue in the weeks to come.

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Mortgage rates continued to move higher to start this week and are now at the highest level in more than three weeks. Rates were influenced Tuesday by a report on October’s retail sales, which rose by 1.7%, making it the strongest month in several years. 

In general, strong economic data puts upward pressure on rates. Economists were only expecting a 1.4% increase after last month’s 0.8% improvement.

If you need to apply for mortgage or have general questions with the changing mortgage rates CLICK HERE to get Preapproved today!