"Higher mortgage rates have quickly shut off refinances"
US mortgage applications continued their downward trend this week, falling to their lowest level since December 2019.
Mortgage loan application volume posted a seasonally adjusted 13.1% decrease for the week ending Feb. 18, according to data from the Mortgage Bankers Association’s latest survey. Refinance application activity was down by 16%, and purchase applications fell 10% week over week. As a result, the refi share of mortgage activity dropped from 52.8% to 50.1%.
Joel Kan, AVP of economic and industry forecasting at MBA, said higher mortgage rates have shut off refinances and slowed purchase activity.
Read more: Increase in new home purchase applications - a good sign
“Conventional refinances, in particular, saw a 17% decrease last week,” Kan said. “Purchase applications, already constrained by elevated sales prices and tight inventory, have also been impacted by these higher rates and declined for the third straight week. While the average loan size did not increase this week, it remained close to the survey’s record high.”
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) inched up from 4.05% to 4.06%. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $647,200) rose from 3.81% to 3.84% week over week.