Residential Real Estate News
Mortgage Rates Uptick in Mid-March, Ending 9-Week Decline in U.S.
U.S. mortgage demand declined last week following the first rise in mortgage rates in nine weeks.
According to the Mortgage Bankers Association's seasonally adjusted index, total mortgage application volume fell by 6.2% compared to the previous week.
The average interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) increased to 6.72% from 6.67%, while points, including the origination fee, rose to 0.64 from 0.63 for borrowers making a 20% down payment. This marked the first rate increase in over two months. Rates were also 25 basis points higher than during the same period last year.
Consequently, applications to refinance home loans dropped 13% for the week, though they remained 70% higher than the same week a year ago. While refinancing activity surged earlier in the month as rates declined, opportunities remain limited due to historically low mortgage rates from three years ago. The percentage increase appears significant because the base volume remains relatively low.
Separately, mortgage applications for home purchases remained nearly unchanged, rising just 0.1% from the previous week but standing 6% higher than a year ago.
"Purchase application volume inched up to its highest level in six weeks, led by a 3 percent increase in FHA purchase applications," said Mike Fratantoni, senior vice president and chief economist at the MBA. "Growing inventories of homes on the market and steadier mortgage rates are supporting home buying activity thus far this spring."
