Mortgage rates dip on Russia-Ukraine conflict, could cause applications to rise
Russia's invasion of Ukraine is having impact on interest rates this week
Interest in applying for mortgages could rebound soon as interest rates begin to fall.
Russia's invasion of Ukraine is having an impact on interest rates.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
"We will continue to assess the potential impact on mortgage demand from the sharp drop in interest rates this week due to the invasion of Ukraine," said Joel Kan, MBA’s associate vice president of economic and industry forecasting.
The yield on the 10-year Treasury declined 0.128 percentage points on Tuesday to 1.708%.· The yield is down for two consecutive trading days, according to Dow Jones Market Data Group.
The change will start to be seen in mortgage rates.
Until that happens, with the higher mortgage rate, demand for mortgage applications fell 0.7% from the prior week, according to the weekly survey of the Mortgage Bankers Association.
New homes in Northern California (iStock)
"Mortgage rates last week reached multi-year highs, putting a damper on applications activity," said Kan. "The 30- year fixed rate reached its highest level since 2019 at 4.15%, and the refinance share of applications dipped below 50%."
RISING MORTGAGE RATES, SKYROCKETING RENTS PUSHING MORE HOMEOWNERS TO MOVE
The seasonally adjusted Purchase Index decreased 2% from one week earlier.
"Purchase activity remained weak, but the average loan size increased again, which indicates that home-price growth remains strong, and a greater share of the activity is occurring at the higher end of the market," added Kan.
CLICK HERE TO READ MORE ON FOX BUSINESS
The survey covers over 75% of all U.S. retail residential mortgage applications and has been conducted weekly since 1990.