Mortgage demand dipped last week as mortgage rates reached their highest levels since November 2023. Applications decreased by 2.3% on a seasonally adjusted basis during the week ending April 26, according to the Mortgage Bankers Association’s (MBA) weekly mortgage applications survey.
“Inflation remains stubbornly high, and this trend is convincing markets that rates, including mortgage rates, are going to stay higher for longer. No doubt, this is a headwind for the housing and mortgage markets, with the 30-year fixed mortgage rate increasing to 7.29% last week, the highest level since November 2023,” Joel Kan, MBA’s vice president and deputy chief economist, said in a statement.
“Application volume for both purchase and refinances declined over the week and remain well below last year’s pace. One notable trend is that the ARM share has reached its highest level for the year at 7.8%. Prospective homebuyers are looking for ways to improve affordability, and switching to an ARM is one means of doing that, with ARM rates in the mid-6% range for loans with an initial fixed period of 5 years.”
Purchase loan application volume fell by 2% from one week earlier, while refinance volume dropped by 3% from the prior week. The refinance share of mortgage activity decreased to 30.2% of total applications, down from 30.8% the previous week.
The MBA survey showed that the average mortgage rate for 30-year fixed loans with conforming balances ($766,550 or less) increased to 7.29%, up from 7.24% last week. Meanwhile, rates on jumbo loans (balances greater than $766,550) also decreased week over week to 7.39%, down from 7.45%.
On Wednesday, HousingWire’s Mortgage Rates Center showed the average 30-year fixed rate for conventional loans at 7.57%, up from 7.52% one week earlier.
