A ‘For Sale’ sign hangs in front of a house on June 21, 2022 in Miami, Florida.
Joe Rydle | Getty Images
after the fall five straight weeksMortgage rates jumped last week, leading to a drop in mortgage demand.
Total mortgage application volume fell 7.7% from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
The average contract interest rate for a 30-year fixed-rate mortgage with a conforming loan balance ($726,200 or less) increased from 6.18% to 6.39%, increasing from 0.64 to 0.70 points (including origination fees), down 20% payment for the loan. A year ago this rate was 4.05%.
“Mortgage rates rose across the board last week, pushing past market expectations inflation will continueThus the Federal Reserve needs to keep monetary policy restrictive for longer,” said Joel Kahn, MBA vice president and deputy chief economist.
Applications for home loan refinance fell 13% for the week and were down 76% compared to the same week a year ago. At current rates, 100,000 fewer borrowers could benefit from refinancing than just a week ago, according to Black Knight data. A year ago, with mortgage rates at 4.05%, there were only 4 million candidates for refinancing.
Mortgage applications to buy homes fell 6% for the week and were down 43% compared to the same week a year ago. Real estate agents across the country are reporting surge in buyer demand The past few weeks are perhaps indicating an early start to a historically busy spring market.
“I really thought, my gosh, this is amazing. Look how fast it turned on a dime,” said Dana Rice, a real estate agent with Compass, who was at a busy open house in Bethesda, Maryland, on Saturday. Was driving “We went to no showings and no one came to the open houses, that many offers I’ve launched over the last few weeks.”
However, there is an unusually high level of all-cash buyers in the market. Peter Fang is one of them. He was at the open house.
“I am very surprised to see so many cash offers in the market. I thought I would be in a much better position but the competition is still there,” said Fang.
Mortgage rates continued to rise this week after a Gov. report on inflation showed that it was higher than expected in January.