Rising Rates Slow Mortgage Application Demand

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates increased again last week. Rates were up week over week 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. The increases led to a decline in both refinance and purchase application demand. Overall, demand was down 8.1 percent from the week before. Joel Kan, MBA’s associate vice president of economic and industry forecasting, says the lack of affordable inventory has slowed activity and also led to an increase in the average loan size. “The average loan size again hit another record high at $446,000,” Kan said. “Activity continues to be dominated by larger loan balances, as inventory remains tight for entry-level buyers.” 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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