As mortgage rates dipped at the beginning of this holiday-shortened week, we wanted to give you a little news that might brighten your day, homebuyers. The average contract interest rate for 30-year fixed-rate mortgages had conforming loan balances rose to 6.98%. That represents an increase from the last rate of 6.92%. This is the third week in a row that mortgage rates have increased, reaching levels not seen since January.
As the Mortgage Bankers Association’s most recent Weekly Applications Report released yesterday shows, even with rising mortgage rates, homebuyer excitement is still strong. Mortgage applications to purchase a home were up 2% from last week. They flew an astounding 18% more than the comparable week last year. If that’s accurate, it would mean that the recent rise in rates has not had a sizeable impact on discouraging would-be homebuyers.
On the refinancing front, it was a tale of two signals. Demand for refinancing jumped 37% from a year ago. This week, refinance applications to refinance a mortgage fell 7%. Conventional refinances were down by 6%, and VA refinances were down even more at 16%.
Joel Kan, an economist for the Mortgage Bankers Association said it reflects the ongoing drop in refinancing applications.
“Conventional refinances were down 6%, and VA refinances dropped 16%,” – Joel Kan
Alongside these findings, points for 30-year fixed-rate mortgages decreased to 0.67 from 0.69, including the origination fee for loans with a 20% down payment. This reduction should offer welcome relief for buyers looking to penetrate today’s unprecedented market.
Matthew Graham, chief operating officer at Mortgage News Daily, explained the broader economic conditions that are seriously dampening demand for housing.
“The Consumer Confidence Index was stronger than expected, but one of its components raised concern over the labor market,” – Matthew Graham
Even with the ongoing tug and pull of mortgage rates and the overall labor market devilry, the housing sector seems to be holding strong. The ongoing demand for home purchases underscores a persistent interest in real estate, even amid rising borrowing costs.