Mortgage applications increase as demand for housing remains strong
Demand for mortgages increased despite average 30-year interest rate shooting up to 7.31% – its highest level in four weeks, according to the Mortgage Bankers Association’s weekly Mortgage Applications Survey.
Mortgage application volume for the week ending September 15 grew 5.4% on a seasonally adjusted basis from the week before. Unadjusted applications jumped 16% from the previous week. MBA’s refinance index rose 13%, and the purchase index climbed 12%.
The surge in loan apps was mainly driven by a supply-demand imbalance – with the combination of elevated rates, high prices, and the shortage of available homes for sale continuing to keep hungry homebuyers on the sidelines.
“Purchase applications increased for conventional and FHA loans over the week but remained 26% lower than the same week a year ago, as homebuyers continue to face higher rates and limited for-sale inventory, which have made purchase conditions more challenging,” said Joel Kan, MBA’s deputy chief economist. “Refinance applications also increased last week but are still almost 30% lower than the same week last year.”
Kan noted that the average purchase loan size increased to $416,800, the highest level in six weeks.
“Home prices in many markets have been supported by low inventory and resilient housing demand for available homes,” he added.
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