Mortgage rates hit nine-month high, loan demand drops further
CNBC’s Diana Olick joins ‘Squawk Box’ to break down the latest home mortgage application data and what is causing mortgage rates to rise in 2022.
The economic damage from the omicron variant of the coronavirus is now expected to be less than initially thought, and that has interest rates back on their upward trajectory yet again. As a result, mortgage demand fell 2.7% to the end of 2021, compared with two weeks before, according to the Mortgage Bankers Association’s seasonally adjusted index. [The MBA did not release application volume last week due to the holidays.]
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) increased to 3.33% at the end of last week from 3.27% two weeks before, with points rising to 0.48 from 0.38 (including the origination fee) for loans with a 20% down payment. That rate was 47 basis points lower the same week one year ago.
As a result, applications to refinance a home loan fell 2% last week compared with two weeks ago and were 40% lower year over year. The refinance share of mortgage activity, however, increased to 65.4% of total applications from 63.9% the previous week, due to continued weakness in the purchase loan market.
Why Boston condo mortgage rates are rising
In the video below, Matthew Pointon, senior property economist at Capital Economics, joins The Exchange with his analysis of the housing market and why Boston condo mortgage rates keep rising.