Mortgage demand was down across the board which pushed total application demand down 5.0% last week, according to the Mortgage Bankers Association’s latest weekly survey…(MBA)
- REFIS: The Refinance Index dropped 8% and is now down 68% when compared to the same time one year ago.
- PURCHASES: The Purchase was also down with a 3.0% drop which puts the index down 14% year-over-year.
NOTE: The refinance share of mortgage activity decreased to 35.7% of total applications from 37.1% the previous week.
Mortgage rates continued their historic climb with a another record year-over-year increase…
- 30-YR FIXED: The average contract rate was up 7 basis points to 5.20%, this is 200 basis points higher than one year ago. Wow.
- 15-YR FIXED: The average contract rate was up 10 basis points to 4.44%, this is now up 177 basis points from one year ago.
NOTE: A 5/1 ARM was up 3 basis points to 4.09% as their share of applications reached 8.5% last week, the highest level since 2019.
Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting, said higher rates is probably pushing possible buyers off the fence…
- “The 30-year rate has increased 70 basis points over the past month and is 2 full percentage points higher than a year ago…In a housing market facing affordability challenges and low inventory, higher rates are causing a pullback or delay in home purchase demand as well. Home purchase activity has been volatile in recent weeks and has yet to see the typical pick up for this time of the year.”
Wow. It’s all that can be said. rates are up 70 basis points in a month and 200 bips in just a year. I’m still impressed with inelasticity of purchase demand. While demand is down 14% year-over-year considering that mortgage rates are up 62% and the average monthly payment is up 42% I’m surprised it is not down more.