Mortgage Rates Tick Up, But Loan Applications Jump Anyway
Mortgage rates inched past 3% this week, averaging 3.02%. According to Freddie Mac, it’s the highest rate seen in 10 weeks.
Unfortunately, it likely won’t be the last, either.
“As the economy progresses and inflation remains elevated, we expect that rates will continue to gradually rise in the second half of the year,” said Sam Khater, chief economist for Freddie Mac. “For those homeowners who have not yet refinanced — and there remain many borrowers who could benefit from doing so — now is the time.”
Despite the jump in rates, mortgage applications increased for the week, rising 2.1%, according to the Mortgage Bankers Association. Purchase loan applications were up 1%, while refinances rose 3%.
“Despite the jump in rates, refinances increased for the second consecutive week, pushed higher by a 4% bump in conventional refinance applications,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Purchase applications have regained an upward trend over the past few weeks. Activity was slightly higher for the third straight week, but remained lower than the same week a year ago. Government purchase applications drove most of last week’s increase, which also contributed to a slightly lower overall average purchase loan size.”
All in all, refinances accounted for 62.5% of all loan activity for the week — up from 61.7% the week prior.
More in mortgage and housing news
- The Supreme Court weighed in on Collins v. Yellen this week, ultimately deeming the Federal Housing Finance Agency’s structure unconstitutional. As a result, President Joe Biden dismissed FHFA Director Mark Calabria mid-Wednesday afternoon. By the end of the day, Sandra Thompson, previously the deputy director of housing and regulatory policy, was named interim director of the agency.
- The share of mortgage loans in forbearance dipped below 4% this week, making the 16th week in a row of declines. According to MBA, 3.93% of all mortgage loans are in forbearance — or about 2 million homeowners.
- The Department of Housing and Urban Development announced changes to how student loan payments are factored into mortgage applications. According to the agency, it should make buying a home easier for the millions of Americans with student loan debt.
This week in mortgage rates
Mortgage rates increased on all loan products this week — some slightly more than others.
Here’s how rates looked for each loan type:
- Conforming 30-year, fixed-rate loans: 3.02% (up from 2.93%)
- 15-year, fixed-rate loans: 2.34% (up from 2.24%)
- 5/1 adjustable-rate loans: 2.53% (up from 2.52%)
Check back next week for the latest in mortgage news.
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