- The average contract interest rate for 30-year fixed-rate mortgages with matching loan balances ($726,200 or less) rose to 6.57% from 6.48%.
- Mortgage applications for a home purchase fell 4.8% last week, compared to the previous week.
- Mortgage refinance applications fell 8% for the week.
A ‘For Sale’ sign hangs in front of a home on June 21, 2022 in Miami, Florida.
Joe Riddle | Getty Images
High mortgage rates and an acute shortage of homes for sale are negatively affecting mortgage demand.
Mortgage applications for a home purchase fell 4.8% last week, compared to the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Trading volume was 26% lower than in the same week a year ago.
“Orders fell to the slowest pace in a month, as buyers remain wary of this price volatility, but also because selling inventory in many parts of the country remains scarce,” Joel Kahn, an MBA economist, wrote in a statement.
The average contract interest rate for 30-year fixed-rate mortgages with matching loan balances ($726,200 or less) rose to 6.57% from 6.48%, with points remaining at 0.61 (including origination fees) for loans with a 20% down payment. . This is the highest rate in two months. The 30-year flat rate was 5.49% in the same week a year ago.
Mortgage rates rose last week, even as Treasury yields were basically flat, with the spread between the two rates widening to 310 basis points.
“Mortgage rates have generally struggled against Treasuries since the Fed ended reinvesting the proceeds of its bond portfolio in late 2022,” explained Matthew Graham, chief operating officer. “Recently, the rising supply of mortgage debt due to various FDIC liquidation efforts has weighed on the sector.”
Home loan refinance applications fell 8% for the week, as refinances became more sensitive to weekly changes in interest rates. Demand is down 43% year over year. With rates more than double what they were in the early years of the pandemic, there are very few borrowers left who can take advantage of refinancing.
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