Mortgage rates—and loan applications—ticked up last week as markets digested mixed messages about the state of the economy, a mortgage trade group said today.
The average 30-year fixed mortgage rate on loans with conforming balances increased to 6.42%, from 6.41% the week prior, the Mortgage Bankers Association said this morning. Despite the slight increase, the rate was still near the lowest point in a month, the trade group’s vice president said in a statement.
“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,” said Joel Kan, the Mortgage Bankers Association’s vice president.
Prospective buyers took the relatively low rates in stride: The trade group’s seasonally-adjusted purchase index, which measures the volume of applications for home purchase loans, increased 4% from the week prior. Refinance application volume also increased.
Despite the near-term improvement, application volume remained low relative to 2021. The trade group’s purchase index was 38% lower than the same week last year. “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,” Kan said.
Housing market activity in the second half of 2022 has been largely driven by mortgage rates, which have gained as the Federal Reserve has acted to control inflation. Weekly rates gauged by
increased to a high of 7.08% in October and November before pulling back in recent weeks.
“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,” Kan said.
There are signs that economic data released on Tuesday helped drive mortgage rates lower. Rocket Mortgage on Tuesday was quoting interest on a 30-year purchase loan at about 6.63%, a decrease of about 0.37 percentage point from the day prior. The message from the Federal Reserve following the central bank’s FOMC meeting, expected Wednesday afternoon, could determine where mortgage rates are headed next.
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