|
The
Mortgage Bankers Association on Wednesday said its weekly
measure of the average contract rate on a 30-year, fixed-rate
mortgage climbed to 3.64% in the week ended Jan. 14 from 3.52% a
week earlier. That was the highest since March 2020 when the
pandemic triggered a recession and drove borrowing costs to
historic lows as the Fed cut its benchmark interest rate to near
zero.
With inflation running at the highest rate in a generation and
the job market near full employment, the Fed is now seen rapidly
reining in the accommodation it put in place in the spring of
2020, and financial markets are frantically repricing for an
initial rate hike by the central bank by mid-March.
That reset has driven up the yields on the Treasury securities
that influence mortgage rates, and home financing costs have
followed suit: MBA's 30-year contract rate has climbed from
3.27% in mid-December.
The rate rise is crimping application volumes for mortgage
refinancings, but appears to be helping to lift applications for
home-purchase loans, which saw the largest increase in six
months last week as prospective buyers looked to lock in rates
that, while rising, are still historically low.
Overall loan application volumes rose 2.3% last week on the back
of a 7.9% increase in loans to buy a home, while refinancing
applications dropped 3.1% to their lowest level in more than two
years.
(Reporting by Dan Burns; Editing by Leslie Adler)
[© 2022 Thomson Reuters. All rights
reserved.]
This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|
|
