Homes in Discovery Bay, California, USA, Thursday, November 7, 2024. US mortgage rates rose to the highest level since July.
David Paul Morris Bloomberg Getty Images
Mortgage rates continued to rise last week as investors considered the future of the economy under a Trump presidency. The mortgage market is basically taking a breather.
Total application volume was basically flat, rising just 0.5% last week, compared to the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. While small, the increase marked the first rise in overall demand in seven weeks.
The average contract interest rate for 30-year fixed-rate mortgages with loan balances of $766,550 or less increased to 6.86% from 6.81%, with a point decrease of 0.60 from 0.68, including origination fees, for installment loans down 20%. .
“Mortgage rates continued to rise last week, driven by higher Treasury yields as financial markets digested the impact of the Trump presidency,” said Joel Kan, deputy chief economist of the Mortgage Bankers Association. “The Federal Reserve’s 25 basis point rate cut has been anticipated and is unlikely to move the market.”
Applications for home loan refinance, the most sensitive to weekly movements in interest rates, fell 2% for the week to the lowest level since May. However, it was 43% higher than the same week a year ago. Last year at this time, mortgage rates were 75 basis points higher.
Applications for mortgages to buy homes rose 2% for the week and 1% higher than the same week a year ago. Homebuyers may be seeing lower rates than last year, but they are also seeing higher home prices. Meanwhile, the supply of homes for sale remains low.
Kan noted that applications for loans supported by the Federal Housing Administration and the US Department of Veterans Affairs helped drive stronger purchasing activity, increasing by 3% and 9% respectively.
“FHA mortgage rates compared to overall trends and were lower during the week, which may help some borrowers,” Kan said. “Conventional purchase applications are also up slightly.”
Mortgage rates move higher this Tuesday; The bond market is closed Friday for the Veterans Day holiday.
“The market continues to work through the volatility associated with the election,” wrote Matthew Graham, chief operating officer at Mortgage News Daily. “These include some complex considerations. Some are related to real expectations for changes in fiscal policy in the coming years. Some considerations are as simple as traders going through the process of exiting (and resetting) trades. Positions going to elections .”
