US Mortgage Applications Decrease As Mortgage Rates Rise
This week mortgage applications decreased 12.8% compared to last week. This is a very large decrease especially taking into account the adjustment for Thanksgiving holiday. One reason for this decrease in mortgage applications could be the increase in mortgage rates we have seen the past two weeks, since higher mortgage rates usually dissuade people from applying for a mortgage.
All mortgage rates increased this week to their highest rates since September, except for 1-year adjustable mortgage rates, which showed a slight decrease this week. This year mortgage rates have gone from near-record low rates in May to very high rates, both which we see now and in September. However, in October new home prices recovered as mortgage rates decreased during that month, which helped stabilize the economy and the home-sale sector.
According to Freddie Mac, 30-year fixed-rate mortgages skyrocketed, reaching 4.46% this week compared to 4.29% last week.
15-year fixed-rate mortgages also increased a lot, going from 3.3% last week to 3.47% this week.
5-year adjustable-rate mortgages also showed a slight increase, reaching 2.99% this week compared to 2.94% the previous week.
1-year adjustable-rate mortgages are the only rates that decreased this week, reaching 2.59% down from 2.6% last week.
The refinance share of mortgage activity decreased this week to 63% of all mortgage applications compared to 66% last week. The adjustable-rate mortgage share of activity remained at 8% of mortgage applications.
