Mortgage Rates Increase Again; Purchase Loans Increase Despite It

Mortgage Weekly Update

Another week, another mortgage rate increase. According to the latest Freddie Mac data, mortgage rates are now sitting at 5.30% on average — up from 5.27% last week and 2.94% a year ago.

The increase didn’t stop homebuyers, though. According to the Mortgage Bankers Association, purchase applications were up 5% for the week.

“Despite a slow start to this year’s spring homebuying season, prospective buyers are showing some resiliency to higher rates.” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Purchase activity has now increased for two straight weeks.”

Refinances, on the other hand, declined for the week. They’re now down 2% compared to last week and 72% over this time a year ago.

“The rapid rise in mortgages rates continues to hit the refinance market,” Kan said. “Most homeowners refinanced to lower rates in the past two years.”

More in mortgage & housing news

  • Mortgages are getting hard to qualify for, according to MBA’s April Mortgage Credit Availability Index. Government loan standards are tightening the most.
  • Homebuyers are making larger down payments these days. A Realtor.com report shows that in the first quarter of 2022, buyers put down nearly twice as much as Q1 2020 ($15,000 vs. $28,000). Only 26% of buyers put 10% down or less.
  • Homebuyers aren’t feeling too hopeful these days. According to Fannie Mae’s Home Purchase Sentiment Index, consumer housing sentiments are the lowest they’ve been in years. Only 19% think it’s a good time to buy a home.
  • Demand may be slowing down, according to a Redfin analysis. The brokerage’s data shows that demand is down 1% over the week and 10% in the last four weeks. Touring activity has also decreased 24% compared to last year.

This week in mortgage rates

Mortgage rates increased across the board this week. Here’s how average rates broke down by loan type:

Check back next week for the most up-to-date mortgage and housing news.

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By Aly Yale / May 12th, 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.