Mortgage applications fell for the third consecutive week as the 30-year fixed mortgage rate rose to its highest level since November 2022 at 7.09%. For the week that ended August 4, mortgage applications fell 3.1% from the prior week, according to data from the Mortgage Bankers Association.
Last week, treasury yields rates and mortgage rates rose. The downgrading of the U.S. government debt rating by Fitch Ratings and the Treasury’s funding announcement that followed played a non-negligible role in this hike, observes Joel Kan, MBA’s vice president and deputy chief economist. As a result, rates increased for all loan types. The rate for FHA mortgages increased to 7.02%, its highest rate since 2002.
“Not surprisingly, mortgage applications continued to decline given these higher rates, with overall application counts falling for the third consecutive week, as both purchase and refinance activity declined,” said Joel Kan. The purchase index fell for the fourth consecutive week, as homebuyers continue to struggle with low for-sale inventory and elevated mortgage rates, added Kan. It remains 27% behind last year’s levels.
Meanwhile, the refinance index decreased 4% since last week and is 32% lower than it was the same week a year ago.
At Mortgage News Daily, 30-year fixed-rate mortgage rates were at 7.04% on Tuesday. At HousingWire’s Mortgage Rates Center, Optimal Blue had rates at 6.97% on Monday.
The Federal Housing Administration loans’ share increased to 13.6% from 13.3% the week prior. The U.S. Department of Veteran Affairs loans’ share ticked up to 11.8% from 11.6%. And the U.S. Department of Agriculture loans’ share fell to 0.4% from 0.7%.
Adjustable-rate mortgages increased to 6.9% of total loan applications last week, the MBA said. The average contract interest rate for 5/1 ARMs climbed to 6.36% from 6.18% a week prior.
