Mortgage Rates Continue To Climb Higher

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates continued their climb upward last week. In fact, rates were up from the week before across all loan categories, including 30-year fixed-rate loans with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. Joel Kan, MBA’s associate vice president of economic and industry forecasting, says rising rates haven’t slowed demand for loans to buy homes. “The hot job market and rapid wage growth continue to support housing demand, despite the surge in rates and swift home-price appreciation,” Kan said. “However, insufficient for-sale inventory is restraining purchase activity.” The lack of homes for sale is especially challenging for first-time home buyers. For example, though purchase loan demand was down 3 percent last week, it fell 8 percent for FHA loans, which are more popular with entry-level buyers. Overall, mortgage application demand was down 6.3 percent last week, mostly due to a 10 percent drop in refinance activity. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

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