By Bronson Winslow for Daily Caller News Foundation
Mortgage rates have continually increased for 10 straight weeks, with current 30-year fixed rates hitting their highest point since 2001.
Mortgage rates hit 7.16% for the week ending in Oct. 21 as markets simultaneously saw a 2% decrease in demand for loans, according to a Mortgage Bankers Association (MBA) survey. Mortgage rates are predicted to continue climbing as ongoing inflation concerns have left many analysts predicting another hike in interest rates, CNBC reported.
“Mortgage rates increased for the 10th consecutive week, with the 30-year fixed rate reaching 7.16%, the highest rate since 2001. The ongoing trend of rising mortgage rates continues to depress mortgage application activity, which remained at its slowest pace since 1997,” MBA’s Vice President and Deputy Chief Economist Joel Kan said in the survey.
The Refinance Index, which measures the number of loans being refinanced in the mortgage market, reflected a slight uptick of 0.1% week-by-week, but was 86% percent lower year-over-year, according to MBA. The Purchase Index, used to measure new loan activity in the mortgage market, decreased by 3% week-to-week and 42% year-over-year, showing that new and continued activity in the mortgage market is stagnating.
“Refinance applications were essentially unchanged, but purchase applications declined 2 percent to the slowest pace since 2015 – over 40 percent behind last year’s pace. Despite higher rates and lower overall application activity, there was a slight increase in FHA purchase applications, as FHA rates remained lower than conventional loan rates,” added Kan.
The MBA survey points to the mortgage market continually weakening into 2023 as buyers stop taking out loans and wait to refinance existing loans, according to MBA. As a whole, refinance mortgage activity did see an increase of 0.3% week-over-week, but adjustable-rate mortgage (ARM) activity decreased to 12.7%.
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