Rates Inch Up Slightly, While Mortgage Applications See Steep Drop
Mortgage rates increased ever so slightly last week. According to Freddie Mac, the average rate on a 30-year loan was 3.11% — up from 3.10% the week prior.
“Mortgage rates continue to remain stable notwithstanding volatility in the financial markets,” said Sam Khater, Freddie Mac’s chief economist. “The consistency of rates in the face of changes in the economy is primarily due to the evolution of the pandemic, which lingers and continues to pose uncertainty.”
Despite rates largely holding steady, mortgage applications fell steeply, dropping 7.2% over the week, according to the Mortgage Bankers Association. Purchase loan activity dipped 5% and is now 30% lower than it was a year ago.
Refinances also fell for the week, dipping 15% from last week. They’re also 41% below last year’s numbers and account for a mere 59.4% of all loan activity — down from 63.1% the week previous.
Another notable number? That’d be the average loan amount, which just hit its highest point in months.
“Despite higher mortgage rates, purchase applications had a strong week, mostly driven by a 6% increase in conventional loan applications. Conventional loans tend to be larger than government loans, and this was evident in the average loan amount, which increased to $414,700 — the highest since February 2021,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “As home-price appreciation continues at a double-digit pace, buyers of newer, pricier homes continue to dominate purchase activity, while the share of first-time buyer activity remains depressed.”
More in mortgage & housing news
- The Federal Housing Finance Agency announced its new conforming loan limits for 2022. According to the agency, Fannie Mae- and Freddie Mac-backed loans will now range from a maximum of $647,200 on the low end (up from $547,250) to $970,800 in higher-cost housing markets (up from $822,375).
- According to Redfin, for-sale inventory has officially hit its lowest point on record. Only a mere 538,000 homes were for sale last week — down from over 700,000 in October.
- Pending home sales fell 2.3% in September, according to Realtor.com. It was also the fourth straight month of annual declines.
This week in mortgage rates
Mortgage rates were another mixed bag this week, with some slightly increases and some dips.
Here’s how rates looked for each loan type:
- Conforming 30-year, fixed-rate loans: 3.11% (up from 3.10%)
- 15-year, fixed-rate loans: 2.39% (down from 2.42%)
- 5/1 adjustable-rate loans: 2.49% (up from 2.47)
Make sure to check back here next week for the latest mortgage rates and news.
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