The mortgage market is showing some resilience after a cold holiday season.
Applications rose 33.3% last week compared to the start of the year, with both purchase and refinance volume rising in double digits, the Mortgage Bankers Association reported. The dramatic jump came despite the 30-year fixed-rate mortgage rising past 7%.
Joel Kan, the MBA’s vice president and deputy chief economist, said in a press release mortgage applications are volatile this time of year.
“Bond yields in the U.S. and abroad continued to move higher in response to concerns over a sticky inflation outlook and still too-high budget deficits, which pushed mortgage rates higher for the fifth consecutive week,” he said.
The effective rate for most loan products tracked by the trade group climbed last week. High rates have dampened application volume in recent weeks, and lenders have responded by loosening mortgage credit availability.
The post New Year’s bump in activity included a Purchase Index up 27% weekly, and a Refinance Index 44% greater. Those indexes were 2% lower, and 22% larger than a year ago, respectively.
Sticky mortgage rates continue to hover in the mid-6% and higher ranges; the 30-year FRM moved up 10 basis points last week to 7.09%. The MBA benchmarked rates to the 2024 conforming loan limit of $766,550; the Federal Housing Finance Agency’s new mark is 5% larger.
Jumbo borrowers are also seeing figures past 7%, with their 30-year interest rates rising 6 basis points to 7.05%. Consumers seeking Federal Housing Administration-backed loans are also paying steeper prices, with those rates rising 11 basis points last week to 6.76%.
Adjustable rate mortgages have made up around 5% of home loan activity for a while. Those rates have also crossed a threshold; 5/1 ARMs carried rates of 6.18% last week, also up 20 basis points.
Rate relief is also in short supply. The 15-year FRM average contract interest rate dipped last week, albeit by 3 basis points to 6.46%.
