Real EstateWeekly mortgage demand rose for the first time since...

Weekly mortgage demand rose for the first time since early March last week, but it won’t last

Real estate listings

Adam Jeffery | CNBC

A brief calm in the midst of a rising interest rate storm boosted weekly mortgage demand ever so slightly last week, but it is unlikely to be the start of a new trend. Rates have already moved sharply higher this week.

Total mortgage application volume rose 2.5% for the week ended April 29 compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. That was because mortgage rates took a very slight step back, and the spring housing market entered its historically busiest time.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) decreased to 5.36% from 5.37%, with points falling to 0.63 from 0.67 (including the origination fee) for loans with a 20% down payment. That rate was 218 basis points lower the same week one year ago. Rates shot significantly higher at the start of this week.

The few borrowers who would benefit from a refinance took their chance. Refinance applications rose 0.2% for the week but were still 71% lower than a year ago. Still the refinance share of mortgage activity decreased to 33.9% of total applications from 35.0% the previous week. Refinances made up a majority of mortgage activity last year.

Mortgage applications to purchase a home rose 4% for the week but were still down 11% year over year. Homebuyers are now turning more to adjustable-rate mortgages which offer a substantially lower interest rate and can be fixed rate for up to 10 years. The ARM share of activity remained unchanged at 9.3% of total applications, but that is more than twice the share it was a year ago.

“The purchase market remains challenged by low levels of housing inventory and rapid home-price gains, as well as the affordability hit from higher mortgage rates that are forcing prospective buyers to factor in higher monthly payments,” said Joel Kan, an MBA economist.

Rates resumed their climb this week, which will make it harder for buyers to afford what few options there are on the market. Affordability is near record lows, and the supply of homes for sale has not increased enough to chill competition.

Original Source Link

Latest News

Government debt of $26 trillion sends U.S. on dire trajectory

The U.S. is in danger of a fiscal crisis erupting after a ballooning in deficits in recent years,...

Asus is going big with the Zenfone 11 Ultra

As phone sizes trended upward, one small device stood its ground year after year: the Asus Zenfone. That...

CPL’s Michelle Trott Named President Of The American Institute Of Architects Academy Of Architecture for Health

The American Institute of Architects (AIA; Washington, D.C.) Academy of Architecture  for Health (AAH) appointed Michelle Trott as...

Biden Directs Campaign To Highlight Trump’s “Crazy Sh-t”

President Biden instructed his presidential campaign to start highlighting the “crazy sh-t” that Trump is saying in public. CNN...

Must Read

New bill would let defendants inspect algorithms used against them in court

A pair of Democratic lawmakers are seeking to...

Apple Pay is down for Chase customers, and perhaps others

It appears that Apple Pay is down, particularly...
- Advertisement -

You might also likeRELATED
Recommended to you