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Residential buildings in Discovery Bay, California, USA on Thursday, November 7, 2024. US mortgage rates rose to their highest level since July.
David Paul Morris | Bloomberg | Getty Images
Mortgage rates rose for the fourth week in a row last week. This caused the already very weak demand for mortgages to fall further. Total mortgage applications fell 3.7% from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. An additional adjustment was made for the New Year holidays.
The average contract interest rate for 30-year fixed-rate mortgages with matching loan balances ($766,550 or less) increased to 6.99% from 6.97%, with points falling to 0.68 from 0.72 (including fees for opening) for loans with a 20% down payment. payment This is the highest figure since July 2024.
Applications for home loan refinancing were up 2% from the previous week, but down 6% from the same week a year ago. Rates are now 18 basis points higher than a year ago. In terms of weekly gains, refinancing volume is now so low that skew percentages are higher than usual.
Home mortgage applications fell 7% for the week and were 15% lower than the same week a year ago. The supply of homes for sale is now much higher than last January, but higher interest rates and higher home prices are clearly keeping buyers away.
“Applications for purchases of both conventional and government bonds declined and fell to their slowest weekly pace since February 2024,” said Joel Kahn, vice president and deputy chief economist at MBA. “Refinance applications increased despite higher rates, but the increase was comparable to recent lows and was driven entirely by increases in VA refinances, which continue to show weekly fluctuations.”
According to a separate survey by Mortgage News Daily on Tuesday, the 30-year fixed average was 7.14% this week. Economic data was the driving factor.
“The inflationary component of ISM Services was one of the biggest detractors, but the increase in vacancies did not help. The spike in profitability was immediate but quite modest,” noted Matthew Graham, MND’s chief operating officer.
Additional economic data will follow on Wednesday with the release of Federal Reserve meeting minutes and on Friday with the all-important monthly employment report. They will either keep rates on an upward trajectory or possibly reverse the trend for the new year.
