The average contract interest rate for a 30-year fixed-rate mortgage with a conforming loan balance hit its highest level of the year last week.
Mortgage activity increased anyways, suggesting homebuyers and homeowners are concerned rates aren’t done rising.
Applications for mortgage purchases and refinancings rose 3.3 percent on a seasonally adjusted basis from the prior period for the week ending on Apr. 12, according to the weekly Mortgage Bankers Association survey. The average rate for a 30-year fixed-rate mortgage increased too, from 7.01 percent to 7.13 percent.
Purchase-loan applications increased 5 percent on a seasonally adjusted basis from the previous week. On an unadjusted basis, it rose 6 percent from the previous week, but was 10 percent below last year’s activity.
The refinancing index, meanwhile, increased a minimal 0.5 percent from the previous week and 11 percent year-over-year.
Last week was the second in a row with rising rates, driven in part by data showing a strong economy and persistent inflation; last week’s average rate was the highest since December.
“Despite these higher rates, application activity picked up, possibly as some borrowers decided to act in case rates continue to rise,” MBA chief economist Joel Kan said in a statement.
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The refinancing share of total activity decreased from 33.3 percent the prior week to 32.1 percent last week. The FHA share of applications increased from 12.1 percent to 12.3 percent, while the VA share decreased from 14 percent to 12.4 percent and the USDA share held at 0.4 percent.
The average contract interest rate for a 30-year rate with jumbo loan balances (greater than $766,550) increased 27 basis points to 7.4 percent, while the average contract interest rate for a 15-year fixed-rate mortgage rose from 6.46 percent to 6.64 percent.