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The Mortgage Bankers Association’s (MBA) weekly survey of lenders showed demand for home purchase loans fell last week as rising mortgage rates threaten to dampen the spring homebuying season.
MBA’s weekly application survey showed requests to purchase mortgages fell a seasonally adjusted 1% from the previous week and 14% from a year ago, reversing two consecutive weeks of rising demand. Refinancing requests also fell 3% week over week and down 3% year over year.
Jane Joel
“Mortgage rates rose last week as incoming data showed inflation remained higher than expected, raising concerns about the timing and extent to which the Fed may lower the federal funds rate this year,” said Joel Kan, deputy chief economist at MBA. .”A statement. “Mortgage applications continue to show sensitivity to interest rate changes, with both purchase and refinance activity declining this week.”
With the supply of homes low and prices high, the average loan size for home purchases is $445,000, the highest level since May 2022, Kan said.
In forecasts released Tuesday, Fannie Mae economists said they don’t expect mortgage rates to fall below 6% this year or next, and that a recent spike in mortgage rates could weaken an expected rebound in home sales in 2024 part of the resilience.
Mortgage rates rise again
Tracked Loan Lock Data best blue It showed the average rate for borrowers locking in a 30-year fixed-rate mortgage on Tuesday was 6.88%, up 38 basis points from the 2024 low of 6.50% recorded on February 1 and close to this year’s high of 6.93% recorded in February. 28.
Last year, interest rates climbed to a high of 7.83% on October 25 before falling back in November and December as expectations for a 2024 rate cut by the Federal Reserve have yet to materialize.
For the week ending March 15, MBA reported average interest rates for the following types of loans:
- 30-year fixed rate Qualified Mortgage (loan balances of $766,550 or less), the average interest rate was 6.97%, up from 6.84% the previous week. The effective interest rate increased, although the points for an 80% loan-to-value (LTV) loan fell from 0.65 (including the origination fee) to 0.64.
- 30-year fixed rate interest rate jumbo mortgage (loan balances over $766,550) averaged 7.14%, up from 7.04% the previous week. Points for an 80% LTV loan increased from 0.38 (including origination fee) to 0.54, and the effective interest rate also increased.
- 30-year fixed rate Federal Housing Administration MortgageThe average interest rate was 6.89%, up from 6.77% the previous week. Points for an 80% LTV loan increased from 0.95 (including origination fee) to 1.04, and the effective interest rate also increased.
- The price is 15-year fixed-rate mortgage The average was 6.49%, up from 6.37% the previous week. The effective interest rate increased, although points for an 80% LTV loan dropped from 0.77 (including origination fee) to 0.70.
- for 5/1 Adjustable Rate Mortgage (ARM), the average interest rate was 6.33%, down from 6.38% the previous week. Although the points for an 80% LTV loan increased from 0.52 (including origination fee) to 0.55, the effective interest rate also decreased.
Spreads on mortgages qualifying for jumbo narrowed in March
The “spread” between jumbo mortgage rates and conforming mortgage rates began to narrow in March amid concerns about the impact of commercial real estate lending on area banks.
Jumbo conforming mortgage rate spreads widened from an average of 16 basis points in 2023 to 42 basis points in the first two months of 2024. From March 1 to March 19, Optimal Blue data shows that the spread narrowed to 30 basis points.
Jumbo mortgages that exceed mortgage giants Fannie Mae and Freddie Mac’s loan limits, as well as “non-QM” loans that don’t meet Fannie Mae and Freddie Mac’s underwriting requirements, accounted for February’s mortgage loan value, according to the latest data from Optimal Blue 11%. Origin Market Monitoring.
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