Mortgage rates broke out of their recent holding pattern, rising sharply last week and triggering a noticeable slowdown in application volume. Total mortgage applications fell 5.1%, per the Mortgage Bankers Association’s latest seasonally adjusted data.
The average 30-year fixed mortgage rate for loans under $806,500 climbed to 6.92%, up from 6.86% the week prior. Borrowers also saw a slight uptick in loan fees, with average points rising to 0.69 for those putting 20% down. That’s nearly identical to where rates stood this time last year—just 9 basis points lower.
According to MBA’s chief economist Mike Fratantoni, markets are responding to inflation pressure and ballooning federal debt, which are pushing yields (and mortgage rates) higher.
Home purchase applications, which had been gaining ground, dropped 5% week-over-week. Despite that dip, volume remains 13% ahead of the same time last year. An increase in listings is offering buyers more options, but rising rates—and growing economic caution—are cooling the usual springtime momentum.
Refinancing demand also took a hit, down 5% for the week. While refi applications are still up 27% year-over-year, today’s rate environment offers limited upside for many borrowers, especially those who locked in historically low rates in recent years.
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