Realtors Rosa Arrigo, downtown, and Elisa Rosen, right, work on an open house in West Hempstead, New York.
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Mortgage rates are back on the rise, after a brief decline in May, and the housing market is still suffering from a lack of quotations. As a result, the demand for mortgages continues to fall.
Total mortgage application volume fell 6.5% last week compared to the week before, according to the Mortgage Bankers Association̵[ads1]7;s seasonally adjusted index. Demand reached its lowest level in 22 years.
The average contract rate for 30-year fixed-rate mortgages with a corresponding loan balance ($ 647,200 or less) increased to 5.40% from 5.33%, with points up to 0.60 from 0.51 (including the set-up fee) for loans with a 20% decrease. payment.
Refinancing demand, which is most sensitive to weekly interest rate movements, fell a further 6% for the week and was 75% lower than the same week a year ago. The vast majority of mortgage holders now have interest rates that are significantly lower than the current one, and even those who want to withdraw cash from their homes choose other mortgages instead of refinancing their first mortgage rights.
“While interest rates were still lower than they were four weeks ago, they remained high enough to continue to suppress refinancing activity. Only government refinancing saw a slight increase last week,” said Joel Kan, an MBA economist.
Mortgage applications to buy a home fell 7% for the week and were 21% lower than the same week a year ago.
“The buying market has suffered from persistently low housing inventories and jumps in mortgage rates over the past two months. These worsening reasonableness challenges have been particularly difficult for potential first-time buyers,” Kan said.
Mortgage rates went even higher to start this week, according to a separate survey from Mortgage News Daily. Prices have been in a narrow range for several weeks after moving significantly higher in previous months.
“There is a certain chance that the upper limits of that area will end up being a ceiling on interest rates, but that will depend on inflation and other incoming economic data,” wrote Matthew Graham, CEO of Mortgage News Daily. “With an important inflation report set for release on Friday morning, the potential for volatility remains high.”