Mortgage demand slows as rates hit 7-month high
The 30-year fixed mortgage rate rose to 3.23%
Demand for mortgage applications remained tepid last week as rates rose to their highest level since July.
Total mortgage loan volume rose by a seasonally adjusted rate of 0.5% in the week ended Feb 26., according to the Mortgage Bankers Association. Refinancings were up 0.1%.
“Mortgage rates jumped last week on market expectations of stronger growth and higher inflation,” Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a statement.
The 30-year fixed mortgage rate for a home with a balance of less than $548,250 increased to a seven-month high of 3.23%, up from 3.08% the week prior. Mortgage rates have increased in seven of the past nine weeks.
The rise in mortgage rates resulted in the overall share of refinancings falling for a fourth straight week as refinancing applications declined by more than 2% to a four-month low.
Last week, applications fell by 12% while refinancings were down 11% as rising rates and weather-induced power outages across Texas snarled demand.
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Despite the recent weakness in the market, there is reason for optimism.
“The housing market is entering the busy spring buying season with strong demand,” Kan said.