Mortgage Rates Fall Slightly; Buyer Applications Do Too

Mortgage Weekly Update

Mortgage rates slipped a little this week, falling to 5.70%, according to Freddie Mac. That’s down from the 5.81% seen last week but is up significantly from the 2.98% average one year ago.

The slight dip couldn’t bring buyers back into the fold, though. According to the Mortgage Bankers Association, purchase applications were down 21% for the week and are now 24% below last year’s numbers. 

Refinances, on the other hand, increased by 2%. They now account for 30.3% of all loan activity — up from 29.7% last week.

“The decline in mortgage rates led to a slight increase in refinancing, driven by an uptick in conventional loans,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “However, refinances are still 80% lower than a year ago and over 60% below the historical average.”

Average loan amounts continued to decline. MBA’s numbers show an average loan of $413,500 last week — down from the record $460,000 high reached in March. 

More in mortgage & housing news

  • The median new mortgage payment is now $1,897, according to MBA. That’s 37.1% higher than at the start of the year, when mortgage rates were considerably lower.
  • A new Redfin report shows that vacation home demand has decreased significantly and is now 4% below pre-pandemic levels. In March 2021, demand for vacation properties was 90% above those levels.
  • The latest S&P CoreLogic Case-Shiller Index was released this week, showing a 20.4% increase in home prices between April 2021 and April 2022. FHFA’s House Price Index also came out. That one notched an 18.8% jump since last April, with the biggest upticks in the South Atlantic region of the country.

This week in mortgage rates

Mortgage rates rose on some products and dropped on others. Here’s how average rates broke down by loan type:

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

June 23, 2022 – Mortgage Rates Continue Upward Climb

The average mortgage rate on 30-year loans is now 5.81%, according to Freddie Mac. That’s up more than two full percentage points since just the start of the year and is the highest average rate since 2008.

Still, mortgage applications increased for the week. According to the Mortgage Bankers Association, purchase loan applications were up 8% compared to last week.

“Purchase applications increased for the second straight week — driven mainly by conventional applications — and the ARM share of applications jumped back to over 10%,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “However, purchase activity was still 10% lower than a year ago, as inventory shortages and higher mortgage rates are dampening demand. The average loan size, at just over $420,000, is well below its $460,000 peak earlier this year and is potentially a sign that home price growth is moderating.” 

Refinances, on the other hand, dropped 3% for the week and are now 77% below last year’s levels. Refis made up just 29.7% of all loan activity across the week.

As Kan explained, “Mortgage rates are now almost double what they were a year ago, leading to a 77% drop in refinance volume over the past 12 months.”

More in mortgage & housing news

  • An analysis from Redfin found that rising mortgage rates are having a profound impact on homebuyer budgets. According to the report, buyers on a $2,500 monthly budget have lost nearly $120,000 in buying power just this year.
  • The median rent jumped 15.5% between May 2021 and May 2022, according to Realtor.com. Rents rose the most on studio rentals and in Miami, where rents increased nearly 46% over the year.
  • A new report from the Harvard Joint Center for Housing Studies shows that first-time homebuyers now need a whopping $27,400 to afford a typical down payment on a median-priced home. That rules out 92% of renters, whose median savings is just $1,500.

This week in mortgage rates

Mortgage rates rose 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.

June 16, 2022 – Mortgage Rates Rise Again, Inch Toward 6%

Mortgage rates are now creeping toward 6%. According to Freddie Mac, the average rate on 30-year loans is now 5.78% — up from 5.23% last week and just 2.93% a year ago.

“Mortgage rates surged as the 30-year fixed-rate mortgage moved up more than half a percentage point, marking the largest one-week increase in our survey since 1987,” said Sam Khater, Freddie Mac’s chief economist. “These higher rates are the result of a shift in expectations about inflation and the course of monetary policy. Higher mortgage rates will lead to moderation from the blistering pace of housing activity that we have experienced coming out of the pandemic, ultimately resulting in a more balanced housing market.”

Higher rates couldn’t keep borrowers away, though. Mortgage applications were actually up for the week, according to the Mortgage Bankers Association. Purchase loans were up 18% over a week ago but 16% below the same week last year. Refinances also increased for the week (4%) and were down 76% compared to a year ago.

“Despite the increase in rates, application activity rebounded following the Memorial Day holiday week but remained 0.29 percent below pre-holiday levels,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “With mortgage rates well above 5%, refinance activity continues to run more than 70% lower than last year. Purchase applications were down more than 15% compared to last year, as ongoing inventory shortages and affordability challenges have cooled demand, coinciding with the rapid jump in mortgage rates.”

Refinances accounted for just 31.7% of all mortgage activity this week. ARMs, which have seen increased interest in recent weeks, made up 8% of all loans.

More in mortgage & housing news

  • According to Realtor.com, the hottest housing markets for May were also some of the most affordable. Of the 20 most popular markets nationwide, a whopping 16 had home prices below the national median. The top market for the month was Manchester, New Hampshire.
  • Investors appear to be pulling back in light of higher interest rates. According to Redfin, investor home purchases are now down 17% from their pandemic highs. They accounted for about 20% of all home purchases in the first quarter of the month.
  • Zillow’s data shows iBuyer sales made up 1.3% of all home purchases last quarter, with the most activity in Atlanta, Phoenix, Dallas-Fort Worth, Houston, and Charlotte. The median markup for these properties was 14%.

This week in mortgage rates

Mortgage rates rose 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 / June 30th, 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.