A real estate brand promoting an "Under contract " house is represented in Vienna, Virginia, outside Washington.Larry Downing | Reuters
An unusual increase in home purchases, even as the market enters the historically slow holiday season, is pushing up mortgage demand. Total mortgage application volume rose 1.8% last week from the previous week, according to the Mortgage Bankers Association's seasonally adjusted index.
The increase is widely due to home buying requests, which increased by 5%. % for the week but was still 4% lower than the same week a year ago. This was the third consecutive weekly gain.
Buyers can rush through the usually slow holiday season as they fear mortgage rates will rise even higher than they are. 'have done in the past month. Given the high price of homes today, some buyers could see their prices increase if rates were to rise significantly.
"The demands for conventional and government loans have increased, and the average loan amount for one purchase stood at $ 407,200, continuing its current run in 2021, which is mostly greater than $ 400,000 "said Joel Kan, MBA economist. , in a press release.
Mortgage rates have risen over the past month and continued to do so over the past week. The average contractual interest rate for 30-year fixed rate mortgages with compliant loan balances ($ 548,250 or less) increased from 3.20% to 3.24%, with points dropping from 0. 43 to 0.36 (including origination fees) for loans with a 20% drop in payment.
Mortgage applications to refinance a home loan were essentially flat, increasing only 0.4% from the weeke previous. They were 34% lower than the same week a year ago, when rates were 32 basis points lower.
"Financial markets continue to discern the Federal Reserve's policy trajectory over the coming months in light of the current environment of high growth and high inflation. Despite a good rate volatility Last week mortgage rates were higher, "said Kan, associate vice president of economic and industrial forecasting at MBA. "Borrowers continue to lock in mortgages in anticipation of higher rates in the future.
The refinancing share of the mortgage business has increased to 63.1% of the total of requests, up from 62.9% the previous week.
Mortgage rates have continued to rise this week and are now more than 10 basis points higher than they were last Friday, according to Mortgage News Daily. Rates are now at their highest level since last April.