Interest rates for home loans have risen each week since the start of this year, so each week it becomes less lucrative for homeowners to refinance their mortgages.

Another drop in refinances last week kept mortgage application volume basically unchanged, up just 0.9 percent seasonally adjusted, compared to the previous week, according to the Mortgage Bankers Association.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased to 4.69 percent from 4.65 percent, with points decreasing to 0.45 from 0.58 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. That is the highest since January of 2014.

Higher interest rates caused applications to refinance a home loan to fall 2 percent for the week and 18 percent compared to the same week one year ago, when rates were lower. The refinance share of all mortgage applications fell to 40 percent, the lowest since 2008.

Mortgage applications to purchase a home did manage to eke out a slight gain, up 3 percent for the week and also up 3 percent compared to the same week one year ago.

“Although the purchase market continues to be constrained by a lack of supply, applications for home purchase loans increased to the highest level in over a month, as demographic and economic conditions remain favorable for housing demand,” said Joel Kan, an MBA economist.

The shortage of existing homes for sale has more buyers looking to new construction. Mortgage applications to purchase a newly built home rose 4.6 percent in February, compared to a year ago.

Housing is more expensive today than it has been in a decade, and a decade ago credit was a lot easier to get. The average monthly mortgage payment is now up nearly 13 percent compared to a year ago, according to Realtor.com — a combination of higher home prices and higher interest rates.

While there is plenty of demand for homes, it is mostly on the low end of the market, where supply is leanest, so buyers are having to increase their purchase budgets if they can, along with paying higher rates. That is resulting in fewer sales overall.

“Buyers can expect to see more of their paychecks go to their mortgage payments this year,” said Danielle Hale, chief economist for Realtor.com. “This spring’s home buyers will have to decide: Do they give up some desired home features to get into that lower price range, or do they dig deeper into their wallets?”



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