Mortgage rates went up again last week, making it more difficult for current borrowers to get a new mortgage. The demand for homes appears to be holding up.
The total mortgage application volume decreased last week compared with the previous week. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances increased to 4.80% from 4.50%, with points decreasing to 0.56 from 0.59 for loans with a 20% down payment.
Mortgage rates jumped to their highest level in more than three years last week, as investors continued to price in the impact of a more restrictive monetary policy from the Federal Reserve.
There was a 15% weekly drop in refinance applications. They are down by over 50% from a year ago. The share of mortgage activity that was refinanced decreased from the previous week.
The number of mortgage applications to purchase a home increased 1% for the week but were 10% lower than a year ago. Homebuyers face sky-high prices and record low supply as well as rising mortgage rates. Real estate agents say the competition is not letting up.
I have had more cash buyers this year than I have before, and they are borrowing from their parents. Kelly Theriot McMahon, a real estate agent with Compass in Dallas, said that they are just finding cash because it is more competitive than cash offers.
She said buyers were preparing for a bidding war at the open house.
"You have to look at it knowing you're probably going to have to offer like $40,000 over asking price," said Lauren Poey, a potential buyer.
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