Mortgage rates climb even as loan sizes hit new record high

Mortgage rates continue to climb, dampening demand for mortgages.

Interest in mortgage applications was down 8.1% from a week ago, according to the Mortgage Banker’s Association weekly survey.

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With rising rates, interest in refinancing continued to decline.

The refinance index fell by 7% and the purchase index by 10%.

However, as rates rise, those who want to buy help increase the amount of the loan they are interested in.

Real estate agent Sales manager holding client’s deposit keys after signing lease purchase agreement, regarding mortgage offer and home insurance. (Stock)

“Average loan size again hit a new record high of $446,000,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Activity continues to be dominated by larger loan balances as inventories remain tight for entry-level buyers.”

IN THE COVID-19 HOUSING MARKET, THE MIDDLE CLASS IS PRICED

The dream of home ownership became more out of reach for middle-class Americans during the pandemic, according to the Wall Street Journal. Soaring home prices and a sharp drop in the number of homes for sale have made it harder for many Americans to buy a home than two years ago, according to a National Association of Realtors study released Monday.

The average 30-year fixed rate mortgage rose last week from 3.78% to 3.83%.

“Mortgage rates tracked the US 10-year yield and other sovereign bonds as the Federal Reserve and other key global central banks responded to mounting inflationary pressures and signaled they would begin to remove accommodative policies” , Kan added.

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The survey covers more than 75% of all retail residential mortgage applications in the United States and has been conducted weekly since 1990.

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