Mortgage Rates Hit 6-Month High, Cooling Buyer Demand
Anya’s Market Bites:
Mortgage rates have risen for the fourth consecutive week, reaching their highest level since July 2024. This increase has further weakened mortgage application demand, impacting both home purchases and refinancing.
Key Takeaways:
Rising Mortgage Rates:
The average 30-year fixed mortgage rate increased to 6.99%, up from 6.97% the previous week.
Rates are now 18 basis points higher than a year ago.
Mortgage News Daily reported an even higher 7.14% average rate on Tuesday.
Decline in Mortgage Applications:
Total mortgage applications fell 3.7% week-over-week.
Home purchase applications dropped 7% for the week and were 15% lower than the same time last year.
Applications for government and conventional loans also saw a decline, marking the slowest weekly pace since February 2024.
Refinance Trends:
Refinancing applications rose 2% week-over-week but remain 6% lower than last year.
The slight increase was mainly due to VA refinances, which fluctuate significantly week to week.
Impact on Buyers and Sellers:
Despite increased housing supply compared to last January, higher rates and home prices are keeping buyers on the sidelines.
Buyers are hesitant to enter the market, slowing down demand for both new and existing homes.
Economic Factors Driving Rates:
Inflation concerns and strong job market data contributed to rising yields.
Upcoming economic reports, including the Federal Reserve’s meeting minutes and the monthly employment report, will determine whether rates continue to rise or stabilize.
With mortgage rates nearing 7% again, affordability remains a challenge for buyers. As economic data unfolds, the real estate market will be watching closely to see if relief is on the horizon.
(Source: CNBC)
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Anya Derebenskiy
(949) 942-5183
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