Home https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Business https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Demand for mortgage refinancing falls by 20% as interest rates rise to a 10-month high

Demand for mortgage refinancing falls by 20% as interest rates rise to a 10-month high

Last week, interest rates rose again, prompting homeowners and potential home buyers to withdraw from loans.

The total volume of mortgage applications decreased by 5.1% compared to the previous week, according to the seasonally adjusted index of the Association of Mortgage Bankers.

The average agreed interest rate for 30-year fixed-rate mortgages with corresponding loan balances ($ 548,250 or less) increased to 3.36% from 3.33%, with points increasing to 0.43 of 0.39 (including initiation fee) for loans with a 20% reduction.

As a result, home loan refinancing applications, which are most sensitive to weekly interest rate changes, fell by 5% for the week and were 20% lower than a year ago. This is the slowest pace since June last year.

“Refinancing applications have declined for the fifth week in a row, but there has been an increase in VA lending,”

; said Joel Kahn, an MBA economist. “Overall, the demand for refinancing has decreased, with the volume decreasing by more than 30% in the last 10 weeks.”

Mortgage applications for home purchase decreased by 5% for the week and were 51% higher than a year ago. This annual comparison will be very large over the next few months, as the housing market stopped almost entirely last year at a time when the pandemic was halting the economy. At the beginning of the summer, it bounced dramatically.

“The rapidly recovering economy and improving labor markets are generating significant demand for housing, but activity in recent weeks has been constrained by faster growth in house prices and extremely low stocks,” Kahn said.

Mortgage rates fell this week after refusing to break recent highs. This may portend good for home buyers in the coming weeks.

“Evidence of a sustained change in the middle of interest rates is beginning to increase,” wrote Matthew Graham, chief operating officer of Mortgage News Daily. “The change can be large-scale or short-lived, true, but almost everything is better than the first quarter of 2021. A simple diversion at current levels would be a great victory.”

Source link