Adam Jeffery | CNBC The volume of mortgage applications rose last week for the first time in six weeks, according to the Mortgage Bankers Association, despite the rise in interest rates. Sharp fluctuations in interest rates and uncertainty about the overall direction of the housing market are likely to play a role. The average contract rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) rose to 6.25% from 6.01%, with points down to 0.71 from 0.76 (including origination fee) for loans with 20% down payment. “Bond yields continued to climb higher last week in anticipation of the Federal Reserve meeting in September, where they are expected to announce – in their efforts to slow inflation – another significant short-term rate hike,” said Joel Kan, MBA economist. , in one version. Applications for mortgage refinancing, which are usually very sensitive to large interest rate swings, actually rose 10% for the week, although they were still 83% lower than the same week a year ago. Part of this may be due to the holiday adjustment last week. It may also have been that the very few borrowers left who could benefit from a refinance finally got off the fence, seeing that interest rates could climb even higher in the near future. “The weekly gain in claims, despite higher rates, underscores overall volatility right now, as well as Labor Day-adjusted results last week,” Kan said. Home mortgage applications rose 1% for the week, but were 30% lower than the same week a year ago. Buyers now see less competition in today’s expensive market, so some may jump at the chance. Homes are staying on the market longer and sellers are much more willing to negotiate than they were three months ago. However, prices haven’t come down much yet, and with prices as high as they are now, affordability is historically weak. The small weekly gain in mortgage demand doesn’t really represent the sharp correction happening in the housing market. Mortgage rates shot even higher this week, according to a separate survey by Mortgage News Daily. It showed the average 30-year fixed rate just below 6.5% on Tuesday, ahead of the much-anticipated Federal Reserve meeting on Wednesday. Investors will be watching specifically for commentary not on a current rate hike but on what might come next. “The forecasts will add to any volatility we may have already seen with the decision to raise interest rates. [Fed Chairman Jerome] Powell’s press conference always has the potential to add additional volatility,” wrote Matthew Graham, CEO of Mortgage News Daily.
