Mortgage demand rises for the first time in six weeks, despite sharply higher interest rates

Despite a rise in interest rates, the volume of mortgage applications increased for the first time in six weeks.

The housing market is likely to be disrupted by swings in rates and uncertainty.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances increased to 6 percent from 6 percent, while points decreased to 0.71 from 0.76 for loans with a 20% down payment.

"Treasury yields continued to climb higher last week in anticipation of the Federal Reserve's September meeting, where it is expected that they will announce - in their efforts to slow inflation - another sizable short-term rate hike."

For the week, applications to refinance a home loan, which are usually very sensitive to big rate swings, rose 10%, even though they were still 83% lower than a year ago. The holiday adjustment may have been part of the reason for that. It is possible that the very few borrowers remaining who could benefit from a refinance finally got off the fence, seeing that rates could rise even higher for the foreseeable future.

The weekly gain in applications, despite higher rates, underscores the overall volatility as well as Labor Day-adjusted results the prior week.

There was a 1% increase in mortgage applications for the week, but they were still 30% lower than a year ago. Some people may jump in when they have the chance because there is less competition in the market. The homes are on the market longer and the sellers are more willing to negotiate.

With rates as high as they are, affordability is weak. The small weekly gain in mortgage demand is not indicative of the correction happening in homebuying.

Mortgage rates went up this week according to a survey. Ahead of the Federal Reserve meeting Wednesday, the average rate on the 30-year fixed was just under 6.5%. commentary not on a current rate hike but on what may happen in the future will be watched by investors.

Matthew Graham wrote that the Fed Chairman's press conference always has the potential to add more volatility.