Interest Rates Rise Slightly on Mortgage Loans; Refinances Jump
Interest rates were up this week on 30-year, 15-year, and 5/1 adjustable mortgage loans. The average 30-year rate sat at 3.11%, up from 3.05% the week prior.
Though the increase was minimal, overall mortgage activity declined this week, according to the Mortgage Bankers Association. Purchase loan applications fell 3% and were down 9% from a year prior.
“Mortgage applications fell last week, driven by a 3% decline in purchase applications,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Both conventional and government purchase applications were down, while the average purchase loan increased for the second straight week to $416,200 — the second-highest amount ever. The elevated loan size is an indication that activity is more on the higher end of the market. Home-price appreciation growth remains faster than historical averages and inventory, particularly for starter homes, continues to trail strong demand.”
The decline in mortgage activity wasn’t universal, though. Refinance activity actually rose for the week, increasing 2% over the week before. FHA refinances increased 4%, while VA refinances were up by a whopping 12%.
Overall, refinances accounted for 65.2% of all mortgage activity. That’s up from 63.3% a week ago.
More in mortgage and housing news
- The Federal Housing Finance Agency released its monthly House Price Index this week, and national home prices are now up 17.4% compared to October 2020. They’re also up 1.1% from September 2021.
- CoreLogic also released its price index, this time showing a whopping 19.1% jump in prices — down from the 20%-plus uptick it reported the month prior. Prices were up the most in Phoenix, where the median home price rose over 32%.
- Inflation is having an impact on hopeful homebuyers. According to Redfin, 29% of people say inflation has caused them to delay their homebuying plans, while 11% say it’s forced them to cancel entirely.
This week in interest rates
Mortgage rates dropped on all mortgage products this week. Here’s how rates looked for each loan type:
- Conforming 30-year, fixed-rate loans: 3.11% up from 3.05%)
- 15-year, fixed-rate loans: 2.33% (up from 2.30%)
- 5/1 adjustable-rate loans: 2.41% (down from 2.37%)
Make sure to check back here next week for the latest mortgage rates and news.
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