Mortgage Rates Increase As Demand Falls
According to the Mortgage Bankers Association's Weekly Applications Survey, average mortgage rates were up last week for 30-year fixed-rate loans with both conforming and jumbo balances. Loans backed by the Federal Housing Administration and 15-year loans both saw rates decline. Combined with the impact of the coronavirus, the rate increases helped dampen demand for home purchase loans and led to a drop in refinance activity. Joel Kan, MBA's associate vice president of economic and industry forecasting, said things will likely remain volatile for a while. “Mortgage applications fell last week, as economic weakness and the surge in unemployment continues to weigh heavily on the housing market,” Kan said. “Refinance applications dropped 19 percent, reversing a 25 percent increase the week before. Given the ongoing rate volatility, along with the persistent lack of liquidity in certain sectors of the MBS market, we expect to see continued weekly swings in refinance activity.” The MBA's weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications.