As mortgage rates rise, applications slow
Average contract interest rate for 30-year fixed-rate mortgage increased to 3.20% from 3.16%
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Mortgage rates gained in the past week, putting a damper on demand for mortgage applications.
Mortgage applications declined 2.8% from a week ago, according to the weekly survey from the Mortgage Banker's Association.
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The increase in rates impacted people looking to refinance the most.
The refinance index dropped 5% from the week before.
"Refinance applications decreased for the seventh time in eight weeks, as mortgage rates moved higher after two weeks of declines," said Joel Kan, MBA’s associate vice president of economic and industry forecasting. "Activity has been particularly sensitive to rate movements, and last week’s decline was driven by a drop in conventional and FHA refinance applications, which offset an increase in VA refinance applications."
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However, the seasonally adjusted purchasing index rose 2%.
"Purchase applications increased for both conventional and government loan segments, as housing demand continues to show resiliency at a time – late fall – when home buying activity typically slows," added Kan.
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The average contract interest rate for a 30-year fixed-rate mortgage increased to 3.20% from 3.16%.
The average rate for 30-year fixed-rate mortgages with jumbo loan balances remained unchanged at 3.26%.
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The survey covers over 75% of all U.S. retail residential mortgage applications and has been conducted weekly since 1990.