Weekly mortgage demand flattens as interest rates rise to 7.14%

A man enters a branch of Bank of America in New York.

Scott Mullin | CNBC

Mortgage rates rose again last week, throwing further cold water on demand from both current homeowners and potential homebuyers. of applications decreased by 0.1% from the previous week.

Average contractual interest rates for 30-year fixed-rate mortgages with matching loan balances (under $647,200) rose from 7.06% to 7.14%, a point increase from 0.73 (including origination fees) to 0.77. payment.

“Mortgage rates rose last week on news that the Federal Reserve will continue to raise short-term rates to combat high inflation. , has risen for most loan types.” Joel Kang, MBA Deputy Chief Economist.

Refinancing demand, positively squashed by a sharp rise in interest rates, fell another 4% in the week, down 87% compared to the same week a year ago. Mortgage rates started this year at around 3%, leaving few borrowers with the benefit of refinancing at today’s high interest rates. Refinancing demand is now at his lowest level in 22 years.

Mortgage applications to buy a home increased 1% this week. It wasn’t a big move, but it was the first increase in six weeks. However, purchase demand is still down 41% year-on-year, nearing its lowest level in seven years.

The share of variable rate mortgage (ARM) activity increased to 12% of all applications. ARMs offer lower interest rates and are considered riskier loans, but interest rates can be fixed for up to 10 years.

Mortgage rates have been flat since this week, but could change on Thursday as investors wait for October figures from the government’s consumer price index.

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