Dec. 14 (UPI) — Mortgage applications increased last week after a month of declines under the pressure of higher interest rates, but the total is still off double-digits from where they stood a year ago, according to a report on Wednesday.
The Mortgage Bankers Association’s weekly application survey said overall applications increased by 3.2%, led by a 3% increase in the refinancing index and a 4% increase in the mortgage purchasing index.
While the average interest rate for a 30-year fixed-rate mortgage with conforming loan balances of $647,200 or less increased to 6.42% from 6.41%, it still remained close to the lowest it has been in a month.
Compared to 2021, the refinancing index is off 85% from the same time last year while the purchasing index trails its figures from this past year by 38%.
“Mortgage rates increased slightly after a month of declines, as financial markets reacted to mixed signals regarding inflation and the Federal Reserve’s next policy moves,” Joe Kan, the MBA’s vice president and deputy chief economist, said in a statement.
“However, with rates more than three percentage points higher than a year ago, both purchase and refinance applications are still well behind last year’s pace. The ongoing moderation in home-price growth, along with further declines in mortgage rates, may encourage more buyers to return to the market in the coming months.”
The refinance share of mortgage activity increased to 29.4% of total applications from 28.7% the previous week, the report. The adjustable-rate mortgage, or ARM, the share of activity increased to 7.7% of total applications.
The FHA share of total applications decreased to 13.1% from 13.7% the week prior while the VA share of total applications increased to 11.5% from 11.4%.
