Homebuyers and refinancers disappear as Mortgage interest rates rise. Total mortgage application volume (MAV) fell 1.2 last week according to the Mortgage Bankers Assocation. The MAV is down almost 11 percent in the last 30 days as rates climbed.
Average contest rates for 30 year fixed rate mortgages with conforming loan balance ($417,000<) increased to its highest level since June 2016, 3.75 percent from 3.71 percent, points decreasing to 0.36 from 0.37 for 80 percent loan to value ratio loans.
“Globally, rates have begun to creep upwards as investors anticipate less aggressive monetary policies from central banks, and U.S. rates are being pushed upwards in response,” said Michael Fratantoni, the MBA’s chief economist. “Additionally, new data show continued positive signals regarding the job market and rising inflation, indicating that the Fed is likely to hike in December and will continue increasing rates next year.”
Mortgage applications to refinance are down 2 percent for the week. Refinance activity is 23 percent higher than a year ago when mortgage rates were higher. Loan applications to purchase homes fell 0.4 percent this week. The Federal Reserve is not expected to raise interest rates Wednesday but may do so in December and again before the spring housing season. The home ownership rate rose last quarter but analysts expect more of a fall before the bottom is in.