Demand for mortgage applications remained tepid last week as rates rose to their highest level since July.
Total mortgage loan volume rose by a seasonally adjusted rate of 0.5% in the week ended Feb 26., according to the Mortgage Bankers Association. Refinancings were up 0.1%.
“Mortgage rates jumped last week on market expectations of stronger growth and higher inflation,” Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a statement.
The 30-year fixed mortgage rate for a home with a balance of less than $548,250 increased to a seven-month high of 3.23%, up from 3.08% the week prior. Mortgage rates have increased in seven of the past nine weeks.
The rise in mortgage rates resulted in the overall share of refinancings falling for a fourth straight week as refinancing applications declined by more than 2% to a four-month low.
Last week, applications fell by 12% while refinancings were down 11% as rising rates and weather-induced power outages across Texas snarled demand.
Despite the recent weakness in the market, there is reason for optimism.
“The housing market is entering the busy spring buying season with strong demand,” Kan said.