Purchase Activity Continues Rising Despite Another Uptick in Rates

Mortgage Weekly Update

Overall activity decreased again this week as mortgage rates continue to rise. The Mortgage Bankers Association (MBA) reported in their weekly survey that mortgage applications fell by another 2.2%.

However, despite the overall decrease, purchase activity seems to be heating up as we start to enter the spring market. On a seasonally-adjusted basis, purchase activity was up 2% over the last week while the Unadjusted Purchase Index increased by 3%.

Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting, was able to provide some context for the disparity between these numbers.

“The purchase market helped offset the slump in refinances. [Purchase] activity was up 5 percent from a year ago,” said Kan.” The recovering job market and demographic factors drive demand, despite ongoing supply and affordability constraints.”

For its part, refinancing activity dropped 4% over the last week, coming in 39% lower than it was at the same time one year ago. Once again, the drop is likely due to rising rates, which have just hit their highest level since June 2020, Per the MBA, the rate run-up seems to have reduced the incentive to refinance for many borrowers.

More in mortgage and housing news

  • According to The Hill, Rep. Ilhan Omar (D-Minn.) introduced a second bill that would guarantee rent and mortgage forgiveness throughout the pandemic.
  • Housing Wire reports that Fannie Mae is tightening its underwriting criteria for second homes and investment properties.
  • New construction declined 10.3% in February and hit a six-month low, according to Bloomberg.

This week in mortgage rates

Mortgage rates increased across the board this week with the exception of jumbo loans, which remained unchanged.

Be sure to check back next week for the latest in mortgage news.

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