Despite Unchanged Mortgage Rates, Homebuying Activity Jumps

Mortgage Weekly Update

Mortgage rates held steady again, averaging 3.55% on 30-year, fixed-rate loans, according to Freddie Mac. That’s unchanged from last week but up 50 basis points since the end of December.

While it’s certainly a welcome reprieve from the rising rates seen in recent weeks, according to Sam Khater, chief economist at Freddie Mac, the break is only temporary.

“The economy lost some momentum in January, leaving mortgage rates unchanged from last week and relatively flat for the third consecutive week,” said Sam Khater, chief economist at Freddie Mac. “This stagnation reflects the economic impact of the Omicron variant of COVID-19, which we believe will subside in the coming months. As economic recovery continues going into the spring and summer, mortgage rates are expected to resume their upward trajectory.”

Despite little activity on the rates front this week, mortgage activity surged. According to the Mortgage Bankers Association, mortgage applications were up 12% over the week prior. Purchase loans jumped 4%, while refinances rose 18%.

“Despite the increase in rates, refinance applications were up 18%, driven mainly by a 22 percent jump in conventional applications,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “There has likely been some recent volatility in application counts due to holiday-impacted weeks, as well as from borrowers trying to secure a refinance before rates go even higher.”

The average loan amount also increased for the week, hitting $441,100 — a new high for MBA’s survey. 

As Kan explains, “Stubbornly low inventory levels and swift home-price growth continue to push average loan sizes higher.”     

More in mortgage & housing news

  • New numbers show the national homeownership rate rose slightly in the last quarter of 2021, hitting 65.5%. Homeownership rates were highest among those 65 and up (79.4%).
  • According to a new report from Redfin, new construction now accounts for 34% of all homes for sale. That’s up from just 25% a year ago and the largest share of new construction homes on record.
  • Buyer’s agent commissions dropped to an average of just 2.63% last year, down from 2.69% the year prior. Thanks to rising prices, the average commission still rose, hitting $12,415 on the typical transaction.
  • A new report from ATTOM Data Solutions revealed the top markets for seller profits last year. The San Jose-Sunnyvale-Santa Clara metro took the crown, with an average profit of $575,000. 

This week in mortgage rates

Rates hovered around the same point as last week on all loan products. Here’s what average rates looked like across the board:

Make sure to check back here next week for the latest mortgage rates and news.

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By Aly Yale / February 3rd, 2022 / Categories: / Tags:

Aly Yale

Aly J. Yale is a freelance writer focusing on real estate, mortgage, and the housing market. Her work has been featured in Forbes, Bankrate, The Motley Fool, Business Insider, The Balance, and more. Prior to freelancing, she served as an editor and reporter for The Dallas Morning News. She graduated from Texas Christian University's Bob Schieffer College of Communication with a major in radio-TV-film and news-editorial journalism. Connect with her at AlyJYale.com or on Twitter at @AlyJwriter.