Last week saw a big swing in mortgage interest rates, and that took a toll on demand. Total mortgage application volume fell 1.9% compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
For the week, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $806,500 or less, increased to 6.31% from 6.30% for loans with a 20% down payment. That was the weekly average, but rates actually fell to the lowest level in over a year last Tuesday and then shot up sharply Wednesday afternoon, following the announcement on interest rates from the Federal Reserve and comments from Chair Jerome Powell. Rates continued to rise Thursday, according to a separate report from Mortgage News Daily, and then came back very slightly Friday.
As a result, applications to refinance a home loan, which are most sensitive to daily moves in interest rates, fell 3% for the week, although they were still 151% higher than the same week one year ago. Refinancing had been on a run in the weeks before because interest rates last year at this time were higher.
In a volatile week for interest rates, mortgage demand pulled back
