Rising mortgage rates pushed mortgage demand down to a 7-week low for the week ending February 16th, according to the weekly survey from the Mortgage Bankers Association.
- The mortgage market index fell to 181.6, down 11.5% from the prior week and the lowest level in 7 weeks.
Drop Across the Board. Both purchases and refis plummeted for the week with the refinances seeing the biggest drop to an index of 427, down 12.8% from the prior week and hitting a 6-week low.
- Purchase demand fell to an index of 133.6, down 10.7% from the prior week and the lowest level since October.
- The refinance share of mortgage activity decreased to 32.6% of total applications from 34.0% the previous week.
Rates. The average contract interest rate for a 30-year fixed-rate mortgage with a conforming loan balance rose to 7.06%, up 19 basis points from the prior week and hitting a 10-week high.
Analysis. Mike Fratantoni, MBA’s Chief Economist, said that rising inflation dashed any hopes the market had of rate cut. “Mortgage rates moved back above 7 percent last week following news that inflation picked up in January, dimming hopes of a near term rate cut…Mortgage applications dropped as a result with a larger decline in refinance applications. Potential homebuyers are quite sensitive to these rate changes, as affordability is strained with both higher rates and higher home values in this supply-constrained market.”