The rebound in mortgage rates did not deter buyers last week, with demand for purchase loans increasing for the second week in a row.
A weekly survey by the Mortgage Bankers Association found that requests for purchase loans increased week-over-week by 2 percent seasonally. Even though home purchase loan applications were down 6% from a year ago, off-season demand from buyers amid rising rates could bode well for home sales in the weeks to come. coming up, said Joel Kan, forecaster of the MBA.
“Purchase requisitions have increased for both the conventional and government loan segments as housing demand continues to be resilient at a time – late fall – when home buying activity is generally slowing down. “Kan said in a statement. “The second consecutive increase in purchase requisitions suggests that stronger business activity may continue in the coming weeks.”
Kan said refinancing demand has been “particularly sensitive to rate movements,” and refinancing demands were down 5% week-over-week and 31% from a year ago. year. Refinancing requests represented 62.9% of all requests, up from 63.5% the week before.
After two weeks of decline, mortgage rates rebounded last week. The MBA reported average rates for the following loan types during the week ending November 12:
- For 30-year fixed rate compliant mortgages (loan balance of $ 548,250 or less) rates were on average 3.20%, up from 3.16% the week before. With points dropping from 0.34 to 0.43 (including origination fees) for loans with a loan-to-value ratio (LTV) of 80 percent, the effective rate has increased from last week.
- Rates for 30-year fixed rate jumbo mortgages (loan balances above $ 548,250) were unchanged from a week ago at 3.26 percent. But with points dropping from 0.39 to 0.32, the effective rate increased from last week.
- For 30 Year Fixed Rate FHA Mortgages, the rates were on average 3.23 percent, compared to 3.18 percent. With points falling from 0.31 to 0.41, the effective rate also increased from last week.
- Rates for 15-year fixed rate mortgages on average 2.56 percent, up from 2.52 percent the week before. With points falling from 0.36 to 0.36, the effective rate also increased from last week.
- For 5/1 Adjustable rate mortgages (ARM), the rates were on average 2.89%, compared to 2.82% the previous week. Although the points decreased to 0.16 from 0.25, the effective rate also increased from last week.
As the Federal Reserve withdraws support from mortgage markets over the next eight months, interest rates are expected to rise.
Mortgage Bankers Association forecasters predict that 30-year fixed-rate mortgage rates will average 4% by the end of next year. Fannie Mae economists expect a more gradual rise, averaging 3.4% in the fourth quarter of 2022.
Mortgage rate forecasts diverge
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