Mortgage refis dwindle along with incentives
The rate on the 30-year fixed-rate mortgage increased to 3.72% from 3.64%
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Demand for mortgages took a big hit in the past week as the rate on the 30-year fixed mortgage rose for the fifth consecutive week.
The rate increased to 3.72% from 3.64%, the highest rate since March 2020.
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That sent demand for mortgage applications down 7.1% from a week ago, according to the Mortgage Banker's Association's weekly survey.
The Refinancing Index dropped 13% from the previous week.
"The 30-year fixed rate is now 77 basis points higher than it was a year ago," said Joel Kan, MBA’s associate vice president of economic and industry forecasting. "Unsurprisingly, borrower demand for refinances subsided, with applications falling for the fourth straight week."
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While overall mortgage demand and refinancing suffered, the purchase index bucked the trend and increased by 5% from the prior week.
"The decline in purchase activity was led by a 5 percent drop in government applications, compared to a modest less than one percent decline in conventional applications,"added Kan. "The relative weakness in government purchase activity continues to contribute to higher loan sizes. The average purchase loan size was $433,500, eclipsing the previous record of $418,500 set two weeks ago."
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The survey covers over 75% of all U.S. retail residential mortgage applications and has been conducted weekly since 1990.