The Mortgage Bankers Association showed mortgage applications in the US fell for the 6th straight week. Down 5% in the previous week as mortgage rates continue to lurch higher. The refinancing index sank 7.7% and the purchase index 3%. The average contract rate on a 30-year fixed-rate mortgage increased to 5.2%, the highest since 2010, from 5.13%.
This year’s surge in mortgage rates was hardly unforeseen, given the record lows reached in the pandemic period and concerns about high U.S. inflation readings, but it has unfolded faster than many expected. At the beginning of the year, the average rate on America’s most popular home loan was 3.22%.
“Ongoing concerns about rapid inflation and tighter U.S. monetary policy continued to push Treasury yields higher, driving mortgage rates to their highest level in over a decade. Rates increased across the board for all loan types. In a housing market facing affordability challenges and low inventory, higher rates are causing a pullback or delay in home purchase demand as well. Home purchase activity has been volatile in recent weeks and has yet to see the typical pickup for this time of the year”, said Joel Kan, MBA’s associate vice president of economic and industry forecasting.
Higher mortgage rates typically slow home-buying activity, but the number of applications. Expectations that the Federal Reserve will raise interest rates several more times this year to control inflation are driving up mortgage rates. Home prices continue to push homeownership out of the question for many Americans.
Rising rates are reducing home-loan refinancings, which powered much of the mortgage market’s boom in 2020 and 2021. About four million Refinancings were expected to make up 33% of mortgage originations this year, down from 59% in 2021, according to the Mortgage Bankers Association.
source: Mortgage Bankers Association of America
From The TradersCommunity News Desk