Mortgage Rates See Steep Jump; Home Purchases Rise Nonetheless

Mortgage Weekly Update

Mortgage rates rose steeply this week, clocking in at 3.45% on 30-year loans. According to Freddie Mac, that’s a 33 basis-point increase over just the week prior.

The jump didn’t stop buyers, though. According to the Mortgage Bankers Association, mortgage applications were actually up for the week — at least to purchase a home. 

“The housing market started 2022 on a strong note,” said Joel Kan, associate vice prescient of economic and industry forecasting at MBA. “Both conventional and government purchase applications showed increases, with FHA purchase applications increasing almost 9% and VA applications increasing more than 5%. MBA expects solid growth in purchase activity this year, as demographic drivers and the strong economy support housing demand.”

Refinance applications, on the other hand, declined slightly for the week, accounting for 64.1% of all loan activity — down from 65.4% the week prior

“Mortgage rates increased significantly across all loan types last week as the Federal Reserve’s signaling of tighter policy ahead pushed U.S. Treasury yields higher,” Kan said. “Rates at these levels are quickly closing the door on refinance opportunities for many borrowers. Although refinance activity changed little over the week, applications remained at their lowest level in over a month, and conventional refinance applications were at their lowest level since January 2020.”

More in mortgage & housing news

  • Mortgage loans got easier to come by in December. According to MBA, the overall credit index jumped 0.8% for the month, indicating lending standards are loosening. Conforming loans saw the most improvement, with a 1.1% over the month prior.
  • The share of buyers who think now is a good time to buy a house has dropped to just 26%, according to Realtor.com. Sellers are much more confident in their prospects. A whopping 76% say now is a good time to sell — a 26-point jump compared to last year and the third-highest share on record.
  • A growing number of homebuyers are using crypto to buy their properties. According to a report from Redfin, 12% of first-time buyers say selling cryptocurrency helped them save for a down payment. That’s up from just 5% in 2019.

This week in mortgage rates

Rates increased on all loan products this week. Here’s how rates looked for each loan type:

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

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By Aly Yale / January 13th, 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.