Weekly mortgage demand eases, as interest rates climb to 7.14%

A man walks into a Bank of America branch in New York.

Scott Mill | CNBC

Mortgage rates rose again last week, with more cold water on demand from current homeowners and home buyers. The number of weekly applications fell 0.1% last week from the previous week, according to the Mortgage Bankers Association.

The average contract interest rate for 30-year fixed-rate mortgages with reasonable credit balances ($647,200 or less) rose to 7.14% from 7.06%, plus and scores increase to 0.77 from 0.73 (including the origination fee) for loans with 20% down. pay.

“Mortgage rates edged higher last week after news that the Federal Reserve would continue to raise short-term interest rates to combat rising inflation. Joel Kan , executive vice president of MBA economics.

The demand for refinancing, which was severely damaged by the large increase in interest rates, fell by another 4% for the week and fell by 87% compared to the same week in the year ago. Mortgage rates started this year at 3%, so there are few borrowers left who can benefit from refinancing at today’s high rates. Demand for refinancing is now at a 22-year low.

Home mortgage applications rose 1% for the week. While that’s not a big move, it’s the first increase in six weeks. Consumer demand, however, is still down 41% from last year and near a seven-year low.

The adjustable rate mortgage (ARM) segment increased to 12% of all applications. ARMs offer lower interest rates, and although they are considered riskier loans, their rates can be fixed for 10 years.

Mortgage rates have been on a downward trend since this week, but that may change on Thursday as investors look ahead to October readings from the fourth quarter. government consumer price data.

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