Mortgage refinancing falls to 22-year low as interest rates rise

Mortgage rates rose further last week after the Federal Reserve announced that it would continue its aggressive action to curb inflation. That, and increased uncertainty in the overall housing market, caused the number of mortgage applications to drop 3.7% last week compared to the previous week, to according to the Mortgage Bankers Association’s database.

After a sharp turnaround the previous week, refinancing applications fell 11% for the week and were 84% lower than last week. one last year. They are now at a 22-year low because fewer borrowers can benefit from refinancing at today’s high rates.

The average contract interest rate for 30-year fixed-rate mortgages with a reasonable credit balance ($647,200 or less) rose to 6.52% from 6.25%, with points that up to 1.15 from 0.71 (including origination fee) for loans with 20% down. pay. That’s the highest since mid-2008.

“After a brief lull in July, mortgage rates have risen above 1 percent for the past six weeks,” said Joel Kan, the MBA’s associate vice president of economics and finance. view of business. “Continuing uncertainty about the impact of the Fed’s reduction of its MBS and Treasury bonds is adding to the uncertainty in mortgage rates.”

Home mortgage applications fell 0.4% for the week and were 29% lower than the same week last year. Consumers today still struggle with high prices, even though annual prices are available. now it’s reduced to a quick record.

Due to the recent jump in rates, adjustable rate mortgages are up to 10% of applications and almost 20% of the total dollar amount because ARMs offer low interest rates and can be fixed for 10 years. .

Mortgage rates continued to climb higher this week, crossing the 7% 30-year fixed rate at 7.08%, according to a separate survey’ by Mortgage News Daily. That is the highest rate in less than 20 years.

Leave a Comment