Demand for purchase loans rises for first time in seven weeks

Homebuyer demand for mortgages is close to 2015 lows, according to the Mortgage Bankers Association, despite a 1% rise in purchase loan applications despite last week’s Fed rate hike. remained.

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The recent Fed rate hike didn’t seem to deter homebuyers, with purchase mortgage applications rebounding slightly last week for the first time in almost two months, according to the Home Loan Bankers Association’s weekly survey of lenders.

According to the MBA’s Weekly Mortgage Applications Survey, demand for mortgage purchases rose 1% seasonally last week compared to the previous week, but is down 41% from a year ago. Refinancing requests are down 4% week-over-week and 87% down from a year ago.

Joel Kang

Joel Kang, MBA’s deputy chief economist, said: “Homebuyers were left behind by rising interest rates and continued economic uncertainty, so purchase offers increased for the first time after six weeks of decline. But it remained close to the lows of 2015.” statement“Refinancing continues to decline, with the index reaching its lowest level since August 2000.”

Refinancing requests accounted for 28.1% of all mortgage applications, down from 28.6% the week before, with 12% of applicants for variable rate mortgages (ARMs).

According to Fannie Mae’s monthly survey of homeowners and renters, Homebuyer Sentiment Dropped October marked the eighth month in a row and reached its lowest level since 2011. Only 16% of those surveyed said it was a good time to buy a home, due to persistently high house prices and low mortgage rates. The percentage of people who said it’s time to sell also decreased by 8 percentage points to 51%.

Federal Reserve policymakers approved a 75 basis point hike in the Fed Funds overnight rate for the fourth time this year on Nov. 2, while the FHA and 30-year fixed rate , remains below the 2022 high seen in late October.

Mortgage interest rates suspended

of Optimal Blue Mortgage Market Index, Rates on 30-year fixed-rate loans are below the 2022 high of 7.16% set on October 24, according to daily data updates. Purchases by Fannie Mae and Freddie Mac hit a new 2022 peak of his 7.14% on Friday, Nov.

In the week of November 4th, the MBA reported average interest rates for the following types of loans:

  • 30-year fixed interest rate conforming mortgage (loans outstanding $647,200 or less), interest rates averaged 7.14%, up from 7.06% the week before. The effective interest rate also rose to 7.36% as the points for loans with a loan value ratio (LTV) of 80% increased from 0.73 (including origination fees) to 0.77.
  • 30 year fixed interest rate jumbo mortgage (loans outstanding over $647,200) averaged 6.50%, down from 6.55% the week before. The point for LTV 80% loans rose from 0.70 (including origination fees) to 0.78, but the effective interest rate also dropped to 6.72%.
  • 30-year fixed interest rate FHA Mortgage, the rate averaged 6.86 percent, up from 6.70 percent the week before. As the points he increased from 1.18 to 1.37 (including the origination fee), the effective rate also increased for him to 7.26%.
  • the price of 15 year fixed rate mortgage It averaged 6.40%, up from 6.37% the week before. As the LTV 80% loan points increased from 1.05 to 1.13, the effective interest rate also he rose to 6.68%.
  • for 5/1 Arms, the rate averaged 5.87 percent, up from 5.79 percent the week before. For a loan with points increased from 0.90 (including origination fee) to 0.92 and an LTV of 80%, the effective rate also increased to 6.21%.

The Fed has raised the short-term federal funds rate six times this year, raising the benchmark rate to its target range of 3.75-4%. In September, a Fed policymaker predicted that he would need to raise the federal funds rate to 4.6% by the end of next year to keep inflation in check.

Fed chair last week Jerome Powell said Policy makers may make smaller adjustments to benchmark short-term rates in the future, but Fed Funds rates may need to stay higher than forecasted in September and stay higher for longer. not.

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Email Matt Carter

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