Mortgage rates increased last week as refinancing applications fell and purchase applications held steady.
The Mortgage Bankers Association’s weekly survey of 75 percent of the residential mortgage market saw the average 30-year fixed-rate mortgage increase to 3.13 percent, up seven basis points from 3.06 percent the previous week. Jumbo rates also increased by one basis point to 3.41 percent.
Despite the uptick in rates, the number of applications to buy homes rose by 1 percent, seasonally adjusted, and was 27 percent higher than the same week in 2019, according to the MBA. The MBA metric, known as the purchase index, has seen annual growth for thirteen weeks running.
MBA’s refinance index dropped by an adjusted 5 percent last week, though it was 38 percent higher than a year earlier. Joel Kan, MBA’s head of forecasting, attributed the drop in refinancings to the rising rates.
Last week, Freddie Mac and Fannie Mae announced they would charge lenders a new 0.50 percent fee on refinance loans starting in September. According to MBA, that would tack on another $1,400 for the average consumer looking to replace existing debt.
On the purchase side, Kan pointed to the recent release of July housing starts data, which saw a 22.6 percent month-over-month increase in the number of homes under construction, as a “bright spot” that signals the industry’s response to “the strong demand for buying a home.”
MBA’s index tracking applications for all home loans fell by an adjusted 3.3 percent last week, compared to the first week of August.
Write to Erin Hudson at [email protected]