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US mortgage applications fall as rates creep up – view from across the pond
Mortgage Solutions takes its regular weekly look across the Atlantic and examines what’s going on in the US mortgage market.
The latest Primary Mortgage Market Survey from the Federal Home Loan Mortgage Corporation (Freddie Mac) shows that an average 30-year fixed rate was 7.17%.
This was higher than the previous week’s average of 7.1%, and compared to a year ago, higher than the average of 6.43% in 2023.
The 15-year fixed rate average rose from 6.39% to 6.44% week-to-week, and was up on the previous year’s average of 5.71%.
Sam Khater, Freddie Mac’s chief economist, said: “Mortgage rates continued rising this week.
“Despite rates increasing more than half a percent since the first week of the year, purchase demand remains steady. With rates staying higher for longer, many homebuyers are adjusting, as evidenced by this week’s report that sales of newly built homes saw the biggest increase since December 2022.”
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US mortgage applications decline
Mortgage applications decreased by 2.7%, according to the Mortgage Bankers Association’s (MBA’s) Weekly Mortgage Applications Survey.
Joel Kan, MBA’s vice president and deputy chief economist, said: “Mortgage rates continued to move higher last week, reaching their highest levels since late 2023 and putting a damper on applications activity. The 30-year fixed rate increased for the third consecutive week – the highest since November 2023.
“Purchase applications declined, as homebuyers delayed their purchase decisions due to strained affordability and low supply. The adjustable-rate mortgage (ARM) share of applications increased to 7.6%, consistent with the upward trend in rates, as buyers look to reduce their potential monthly payments.”
The share of mortgage refinance activity fell to 30.8% of total applications, down from 32.1% during the previous week.