Residential homes in Discovery Bay, California, United States, on Thursday, November 7, 2024. US mortgage rates rose to the highest level since July.
David Paul Morris | Bloomberg | Getty Images
Mortgage rates rose last week for the fourth week in a row. This has depressed already very weak mortgage demand. Total mortgage application volume fell 3.7% from the previous week, according to the Mortgage Bankers Association's seasonally adjusted index. An additional adjustment has been made for the New Year holidays.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) rose to 6.99% from 6.97%, with points falling to 0.68 from 0.72 (including origination fees) for lower-interest loans. By 20%. Premium.
Home loan refinancing applications were up 2% from the previous week but were 6% lower than the same week one year ago. Rates are now 18 basis points higher than they were one year ago. As for weekly gains, the volume of refinancing is very low at the moment, with percentages trending higher than they used to.
Home mortgage applications fell 7% during the week and were 15% lower than the same week one year ago. There is now a much larger supply of homes for sale than there was last January, but it is clear that rising interest rates and rising home prices are keeping buyers on the sidelines.
“Purchase orders for both conventional and government loans declined and fell to the slowest weekly pace since February 2024,” said Joel Kahn, vice president and deputy chief economist at MBA. “Refinance applications increased despite higher interest rates, but the increase was compared to recent lows and was driven entirely by increased VA refinancings, which continue to show week-over-week volatility.”
Mortgage rates rose to start this week, according to a separate survey by Mortgage News Daily, whose 30-year fixed rate averaged 7.14% on Tuesday. Economic data was the driving factor.
“The inflation component at ISM Services was one of the worst drivers of the breach, but increased employment did not help. The rise in revenues was immediate but fairly well contained,” noted Matthew Graham, chief operating officer at MND.
More economic data will come on Wednesday with the release of the Federal Reserve meeting minutes, and on Friday with the all-important monthly employment report. This will either keep interest rates on an upward path or perhaps change direction for the new year.
