For 30-year fixed-rate mortgages with conforming loan sums ($647,200 or less), the average contract interest rate rose to 5.47% from 5.43%.
Applications for refinancing increased 4% for the week but were 82% lower than they had been the same week last year.
Despite the robust job market, the buy market is still slowing down, according to Joel Kan, MBA’s associate vice president of economic and industry forecasts.
Mortgage rates increased on average once more last week after declining at the end of July, but daily movements were erratic. The seasonally adjusted indicator from the Mortgage Bankers Association shows that there were increases in refinancing but decreases in applications from homebuyers, indicating a split in mortgage demand.
For loans requiring a 20% down payment, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) rose from 5.43% to 5.47%, with points increasing from 0.65 to 0.80 (including the origination charge). Weekly average didn’t alter much, but daily movements were more pronounced.
Another reading from Mortgage News Daily revealed that the 30-year fixed average rate increased by 36 basis points after first increasing by 45 basis points at the beginning of the week. It then dropped by 41 basis points on Thursday. Such big fluctuations in mortgage rates are uncommon.
The gain in refinancing, which has been slowly declining since the beginning of this year, was probably caused by that instability. For the week, those applications increased 4%. Some people might have acted quickly to benefit from the decrease in prices or they might have been holding out for the cheaper deals from prior weeks. However, compared to a year ago, when rates were just above 3%, refinancing is still down 82%.
Mortgage applications for home purchases, which are less sensitive to changes in weekly interest rates, decreased by 1% for the week and by 19% from a year earlier.
Despite the robust job market, the buy market is still slowing down, according to Joel Kan, MBA’s associate vice president of economic and industry forecasts. Five out of the past six weeks have seen a decline in activity as purchasers stay away due to still-difficult affordability conditions and concerns about the health of the economy.
This week’s mortgage rates started off significantly lower than last week’s, and they have been much less erratic overall. With the release of the most recent consumer price index, which gauges economic inflation, on Wednesday, that may alter. This economic indicator is likely the one that the bond market watches the most closely.