Mortgage demand rises for first time in six weeks despite sharp rise in interest rates

Mortgage applications last week rose for the first time in six weeks, despite higher interest rates, according to the Mortgage Bankers Association.

Sharp changes in interest rates and uncertainty about the overall direction of the housing market may have played a role.

Average contractual interest rates for 30-year fixed-rate mortgages rose from 6.01% to 6.25% with matching loan balances ($647,200 or less) and decreased points from 0.76 (including origination fees) to 0.71. payment.

MBA economist Joel Kang said, “The Federal Reserve is expected to announce another large short-term rate hike to curb inflation at its September meeting, while Treasury yields are expected to rise. It continued to rise last week,” he said. , in the release.

Refinancing applications for mortgages, which are typically very sensitive to large fluctuations in interest rates, actually increased 10% in a week, even though they were 83% lower than the same week a year ago. Part of that may have been due to the previous week’s holiday adjustments. It’s also possible that the very few remaining borrowers who could benefit from refinancing eventually left the fence seeing that interest rates could rise further for the foreseeable future. .

“Despite rising interest rates, the increase in weekly filings underscores the current overall volatility and the Labor Day-adjusted results of the previous week,” Kang said.

Mortgage applications to buy a home were up 1% this week, but down 30% from the same week a year ago. Buyers are realizing there’s less competition in today’s expensive market, so some might be jumping in when the chance arises, as the home is much longer than it was three months ago. It is on the market and sellers are willing to negotiate.

Still, prices haven’t eased much yet, and with interest rates as high as they are now, affordability has been historically weak. does not actually represent the

Another Mortgage News Daily survey showed mortgage rates rose further this week. The average 30-year fixed rate Tuesday fell just below 6.5% ahead of Wednesday’s long-awaited Federal Reserve meeting. Investors are particularly interested in comments about potential future rate hikes, not current rate hikes.

“Forecasts amplify the volatility that could have already been seen in the rate hike decision. [Fed Chairman Jerome] Powell’s press conference always has the potential for more volatility,” wrote Matthew Graham, chief operating officer of Mortgage News Daily.

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