A third consecutive week of rising mortgage rates has buyers and homeowners rethinking their plans.
Applications for mortgage purchases and refinancings decreased 2.7 percent on a seasonally adjusted basis from the previous period for the week ending on Apr. 19, according to the weekly Mortgage Bankers Association survey. The average rate for a 30-year fixed-rate mortgage with conforming loan balances also rose, from 7.13 percent to 7.24 percent.
Purchase-loan applications decreased 1 percent on a seasonally adjusted basis from the week ending on Apr. 12, which brought a jump in activity despite rising rates. On an unadjusted basis, the purchase index increased marginally from the previous week and was 15 percent below last year’s level.
The refinancing index also decreased 6 percent from the previous week; it was up by 3 percent year-over-year.
Last week was the third in a row with rising rates as a strong economy and persistent inflation muddy the looming decision by the Federal Reserve to cut interest rates. Last week’s average rate was the highest since November.
Buyers and those looking to refinance were undeterred by rising rates as of two weeks ago, but the growth streak appears to have since taken hold of activity.
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“Purchase applications declined, as home buyers delayed their purchase decisions due to strained affordability and low supply,” MBA chief economist Joel Kan said in a statement.
The refinancing share of total activity decreased from 32.1 percent the prior week to 30.8 percent last week as those who secured low rates early in the pandemic looked to avoid losing their grip on the bounty. The FHA share of applications increased from 12.3 percent to 12.8 percent, while the VA share decreased from 12.4 percent to 11.7 percent and the USDA share remained at 0.4 percent.
The average contract interest rate for a 30-year rate with jumbo loan balances (greater than $766,550) increased five basis points to 7.45 percent. The average contract interest rate for a 15-year fixed-rate mortgage rose from 6.64 percent to 6.75 percent.