Flattening of interest rates fails to attract mortgage borrowers

Home loan activity slows for fourth time in five weeks despite rates slamming brakes After their recent accelerationAccording to the Mortgage Bankers Association.

The MBA Market Composite Index, which measures weekly applications based on a survey of industry group members, fell a seasonally adjusted 5.6% in the period ended Feb. 23. After falling by 10.6% and 2.3% respectively in the previous two weeks, the MBA Market Composite Index fell by 5.6%. Sales volume also fell 8.6% compared with the same period last year.

With mortgage rates soaring recently, Existing housing market is tight Continue to stymie lenders. The consensus 30-year fixed rate for loans with balances under $766,550 edged down to 7.04% in most markets from 7.06% in the last survey. Borrower points went in the other direction, rising from 0.66 out of 80 to 0.67. Loan-to-value application percentage.

But a 2 basis point drop wasn’t enough to attract borrowers. Purchases and refinances were both down. “Rising interest rates in recent weeks have brought economic activity to a standstill,” Mike Fratantoni, senior vice president and chief economist at MBA, said in a press release.

But he said the strong new-home market shows there is buyer enthusiasm, as evidenced by MBA’s recent survey of homebuilder mortgage affiliates. Data for January showed that applications for new single-family home construction were up more than 19% year over year and 38% higher than in December.

“This disparity continues to highlight the lack of existing inventory as a major limiting factor to increased purchases. However, mortgage rates above 7% certainly do not help.”

Redfin’s Home Buyer Demand Index also shows signs of active consumer engagement with the coming of springThe index, which tracks travel requests and other inquiries from brokerage firm agents, rose from January levels, although severe weather dampened activity for the month.

But curious consumers didn’t drive lending last week, as the MBA’s seasonally adjusted purchase index fell 4.5% from seven days ago and was also down 11.9% from the same survey period in 2023.

The refinance index posted an even bigger weekly decline of 7.3%, closing 1.1% below year-ago levels, with most homeowners currently holding better interest rates. Refinancing applications’ share relative to overall activity fell to 31.2% from 32.6%. % 7 days ago.

Federally-backed lending slowed more sharply than the overall market, with the government index falling a seasonally adjusted 7.5%.Slowing lending, especially refinancing, leading to lower application rates Sponsored by government agencies.

FHA-insured mortgages accounted for 13% of the total, down from 13.2% in the previous survey. Meanwhile, loans backed by the Department of Veterans Affairs accounted for 11.7%, compared with 12.1% seven days ago. Some of this activity comes from the USDA’s plan to keep prices unchanged at 0.5% each week.

Across all categories tracked by the association, rate changes among MBA lenders mostly hovered around levels seen in the previous survey period.

The average contract rate for a 30-year fixed jumbo mortgage rose 4 basis points to 7.2% from 7.16%. The average contract rate for 80% LTV loans jumped to 0.57 from 0.45 the previous week.

The 30-year FHA-backed fixed contract rate fell to 6.86% from 6.91% seven days ago. The typical FHA tenant used 0.99 points, compared with 1.03 the previous week.

The 15-year fixed mortgage average saw its largest increase of the week, rising 9 basis points to 6.7% from 6.61%, and falling to 0.68 from 0.77.

The average interest rate on 5/1 adjustable-rate mortgages was 6.33%, down from 6.37% in the previous survey period, and the score for this type of loan also fell to 0.58 from 0.71.

Overall ARM activity accounted for 7.5% of total trading volume, up slightly from 7.4% a week ago. The share grew despite a 4.1% decline in the ARM index.

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