Rates Rise for Third Week in a Row, Sending Applications Downward
Mortgage activity fell for the third week in a row, as interest rates rose once again. According to the latest Weekly Mortgage Applications Survey from the Mortgage Bankers Association, loan application volume fell by 11.4% over the last week.
Purchase loan applications fell 12%, while refinancing dropped 11% — hitting their lowest point since December. Joel Kan, MBA’s associate vice president of economic and industry forecasting, chalks the dips up to rising mortgage rates, as well as last week’s winter storms.
“Mortgage rates have increased in six of the last eight weeks, with the benchmark 30-year fixed rate last week climbing above 3% to its highest level since September 2020,” Kan said. “Additionally, the severe winter weather in Texas affected many households and lenders, causing more than a 40% drop in both purchase and refinance applications in the state last week.”
Despite the declines, though, mortgage activity is still stronger than this time last year. Refinances are up 50% compared to the same week 2020, and purchase applications are 7% higher. The average loan size is also increasing, hitting a new record-high of $418,000.
More mortgage and housing news
- The share of mortgage loans in forbearance fell again this week. According to MBA, 5.22% of all loans are now in forbearance — down from last week’s 5.29%. About 2.6 million homeowners are currently on a forbearance plan.
- About 905,000 new homes were purchased in January, the second-highest tally since 2014, according to MBA. Applications to purchase new homes were up 17% for the month and 19% over the year.
- The Federal Housing Finance Agency released its House Price Index this week, and the data shows big jumps across the country. According to the report, national home prices rose 10.8% between Q4 2019 and Q4 2020, marking the biggest jump on FHFA’s record. Prices rose most in Idaho, Montana, Utah, Arizona, and Connecticut.
This week in mortgage rates
Mortgage rates rose on all loan types, except for 5/1 ARMs, which saw rates hold steady over the week.
Here’s how rates looked for each loan type:
- Conforming 30-year, fixed-rate loans: 3.08% (up from 2.98%)
- Jumbo loans: 3.23% (up from 3.11%)
- FHA 30-year, fixed-rate loans: 3% (up from 2.93%)
- 15-year, fixed-rate loans: 2.56% (up from 2.47%)
- 5/1 adjustable-rate loans: 2.83%
Make sure to check back here next week for the latest mortgage news.
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