Refis, Purchases Fall as Mortgage Rates Keep Rising
With mortgage rates up slightly, it seems consumers aren’t as quick to buy or refinance these days. In fact, according to the Mortgage Bankers Association, overall mortgage activity was down 4.1% last week.
Purchase loan applications decreased 5%, while refinances dropped 3%.
The slide is likely due to increasing mortgage rates, which averaged 2.96% on 30-year, fixed-rate loans this week. That’s up from 2.92% last week.
“Mortgage rates have increased in four of the first six weeks of 2021, with jumbo rates being the only loan type that saw a decline last week,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Despite some weekly volatility, Treasury rates have been driven higher by expectations of faster economic growth as the COVID-19 vaccine rollout continues.”
To be fair, mortgage activity is still strong compared to a year ago. Purchase applications are up 17% from last year, and refis have risen 46%.
“Purchase applications cooled the first week of February, but homebuyers are still very active,” Kan said. “The average purchase loan size continued to increase, reaching another survey high of $402,200, as the higher-priced segment of the market continues to perform well.”
More in mortgage and housing news
- It got slightly easier to get a mortgage last month, according to data from MBA. The organization’s latest Mortgage Credit Availability Index increased in January, indicating that lending standards have loosened.
- The share of mortgages in forbearance fell to 5.35% of all loans this week, down from 5.38% the week prior. According to MBA, around 2.7 million homeowners are still in forbearance.
- The Federal Housing Finance Agency just announced that borrowers with Fannie Mae or Freddie Mac-backed mortgages can apply for an additional three months of forbearance. The agency has also extended its ban on foreclosures through March 31.
- Marcia Fudge was confirmed to head the U.S. Department of Housing and Urban Development. Fudge is a former U.S. Representative from Ohio.
This week in mortgage rates
Mortgage rates rose on almost all loan products. Jumbo loans were the only exception, seeing a very slight one-point decrease.
Here’s how rates looked for each loan type:
- Conforming 30-year, fixed-rate loans: 2.96%
- Jumbo loans: 3.11%
- FHA 30-year, fixed-rate loans: 2.97%
- 15-year, fixed-rate loans: 2.50%
- 5/1 adjustable-rate loans: 2.92%
Make sure to check back here next week for the latest mortgage news.
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