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.
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