What a nice surprise! Mortgage demand for the first time in six weeks reverse course and gave us a positive week with total demand up 3.8% for the week, according to the Mortgage Bankers Association’s weekly survey.
- The Refinance index was up 10.0% for the week and is now only down 83% from the same time one year ago.
- The Purchase index was up 1.0% for the week and is now down 30% from the same time one year ago.
The breakdown. The refinance share of mortgage activity increased to 32.5% of total applications and adjustable-rate mortgages remained unchanged at 9.1% of total applications.
Mortgage rates. Not surprisingly, rates were up big for the week ending September 19th. The 30-year fixed was up 24 basis points to 6.25%, this is 321 basis points higher than one year ago.
- The 15-year fixed was up 10 bips to 5.40% and the 5/1 ARM saw a big 31 basis point jump to 5.14%
Analysis: Joel Kan, MBA economist, said volatility is the key word for the industry. “Treasury yields continued to climb higher last week in anticipation of the Federal Reserve’s September meeting, where it is expected that they will announce – in their efforts to slow inflation – another sizable short-term rate hike…The weekly gain in applications, despite higher rates, underscores the overall volatility right now as well as Labor Day-adjusted results the prior week.”
BOTTOM LINE: Mortgage rates have now more than doubled where they were last year. The fact that purchase demand isn’t lower still highlights the healthy demand for homeownership that is still out there.