Mortgage rates rose again last week, pushing buyers to stay on the sidelines just as the spring housing market is supposed to be heating up.
Mortgage applications to buy a home fell 6% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Volume was 44% lower than the same week a year ago and is now at a 28-year low.
This is because the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) increased to 6.71% from 6.62%, with points increasing to 0.77 from 0.75 (including the interest rate). origination) for loans with a 20% deposit. That is the highest rate since November of last year.
Mortgage rates have risen 50 basis points in the last month. Last February, rates were in the 4% range.
«Data on inflation, employment and economic activity have indicated that inflation may not be cooling as quickly as expected, which continues to push rates up,» said Joel Kan, an economist at MBA.
Applications to refinance a home loan fell 6% for the week and were 74% lower year-over-year.
“Refinancing applications account for less than a third of all applications and remained more than 70% behind last year’s pace as most homeowners are already subject to lower rates,” Kan added.
Mortgage rates haven’t done much to start this week, but now the trajectory appears to be higher, after a brief reprieve in January. Lower rates to start the year prompted a brief surge in home buying, but home buyer demand for mortgages this month seems to indicate a very slow spring is ahead.