The numbers: Mortgage rates rose this week, as limited inventory and “crimping affordability” is hurting home buyers.
The 30-year was averaging at 6.93% at the end of July, which pushed overall mortgage applications down 1.3%.
Demand for both purchases and refinancing fell. That overall pushed down the market composite index — a measure of mortgage application volume — the Mortgage Bankers Association (MBA) said on Wednesday.
The market index fell 3% to 200.7 for the week ending July 28 from a week earlier. A year ago, the index stood at 279.2.
Key details: High mortgage rates were weighing on home buyers, as they found it more expensive to finance buying a home. The purchase index — which measures mortgage applications for the purchase of a home — fell 3.2% from last week.
Homeowners continued to see the current environment as a bad time to refinance. The refinance index fell 2.5%.
The average contract rate for the 30-year mortgage for homes sold for $726,200 or less was 6.93% for the week ending July 28. That was up from 6.87% the week before, the MBA said.
The rate for jumbo loans, or the 30-year mortgage for homes sold for over $726,200, was 6.89%, down from 6.9% the previous week.
The 15-year rose to 6.39%, up from last week’s 6.37%.
The rate for adjustable-rate mortgages rose to 6.18% from last week’s 6.01%.
The big picture: Rates continued to be volatile, weighing on home buyers who were also facing the problem of low inventory. For the typical home buyer today, it’s a tough market to navigate because it’s not only expensive — given how high borrowing costs are and that home prices are still rising — but also one where competition is back.
What the MBA said: “The purchase index decreased for the third straight week to its lowest level since the beginning of June and remains 26% behind last year’s levels,” Joel Kan, vice president and deputy chief economist at the MBA, said in a statement.
“The decline in purchase activity was driven mainly by weaker conventional purchase application volume, as limited housing inventory and rates still close to 7% are crimping affordability for many potential homebuyers,” he added.
Market reaction: The yield on the 10-year Treasury note
BX:TMUBMUSD10Y
was above 4% in early morning trading Wednesday.
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