Applications for home loans have been flat for two straight weeks, and now mortgage rates are surging again as more worrying inflation data emerges.
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Mortgage rates surged again this week as more worrying inflation data emerged – another potential drag on the spring home-buying season after two straight weeks of stagnant demand for home loans.
Requests to purchase loans fell 0.1% last week compared with the previous week, according to the Mortgage Bankers Association’s weekly survey of lenders, after a seasonal adjustment for the typical increase in applications in the spring. Looking back one year, home loan applications fell 13%.
Jane Joel
“Rising mortgage rates continue to weigh on home purchases,” MBA deputy chief economist Joel Kan said in a statement Wednesday. “While FHA purchases increased slightly this week, purchases Applications overall were unchanged. Refinancing applications were down 5% from last year.”
MBA reported last week that demand for home purchase loans was also essentially flat for the week ended March 22. Mortgage rates fell back to their lowest levels since early March last week after soaring in the days leading up to the Federal Reserve’s March 20 meeting amid a series of worrying inflation reports.
But now interest rates are rising again, although Friday’s personal consumption expenditures (PCE) price index was in line with economists’ expectations, keeping hopes of a rate cut by the Federal Reserve in June.
PCE index is the central bank’s Preferred inflation indicatorand the Chairman of the Federal Reserve Jerome Powell tells Marketplace’s Kai Ryssdal said on Friday that the latest data was “definitely more in line with what we wanted to see.”
But Fed policymakers have said they want more evidence that inflation is moving toward their 2% target, and new data released this week offered no such assurance.
A report released Monday by the Institute for Supply Management showed manufacturing expansion The latest data released on Tuesday follows a 16th straight month of contraction in March. Job vacancy and labor turnover surveys (JOLTS) showed job openings, hiring and wages continued to be strong in February.
In a speech at the Stanford Graduate School of Business on Wednesday, Powell reiterated He expects the Fed to cut interest rates this year, but investors in the bond market, which funds most mortgages, see a growing chance that the Fed may wait until July.
this CME Group Fed Watch ToolInvestors still see a 62% chance that the Fed will start cutting interest rates in June, according to companies that track futures markets to gauge the likelihood of future action by the Fed. However, this is down from 70% a week ago.
Mortgage rates near 2024 highs
Tracked Loan Lock Data best blue The average interest rate showing borrowers locking in a 30-year fixed-rate mortgage on Tuesday was 6.86%, up 36 basis points from the 2024 low of 6.50% set on February 1 and close to this year’s high of 6.93% set in February. 28 .
For the week ending March 29, 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 6.91%, down from 6.93% the previous week. For an 80% loan-to-value (LTV) loan, points dropped from 0.60 (including origination fee) to 0.59, and the effective interest rate also dropped.
- 30-year fixed rate interest rate jumbo mortgage (loan balances over $766,550) averaged 7.06%, down from 7.14% the previous week. While the points for an 80% LTV loan increased from 0.38 (including origination fee) to 0.57, the effective interest rate also decreased.
- 30-year fixed rate Federal Housing Administration MortgageThe average interest rate was 6.74%, down from 6.75% the previous week. Points for an 80% LTV loan dropped from 0.97 (including origination fee) to 0.90, and the effective interest rate also dropped.
- The price is 15-year fixed-rate mortgage The average was 6.35%, down from 6.46% the previous week. Points for an 80% LTV loan dropped from 0.75 (including origination fee) to 0.56, and the effective interest rate also dropped.
- for 5/1 Adjustable Rate Mortgage (ARM), the average interest rate was 6.37%, up from 6.27% the previous week. Points for an 80% LTV loan increased from 0.64 (including origination fee) to 0.68, and the effective interest rate also increased.
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