A real estate agent shows a home to a potential buyer in Miami.

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Mortgage rates rose for the third week in a row last week, hitting a 22-year high. As a result, mortgage demand also declined.

Total mortgage application volume was down 29% compared to the same week a year ago, according to the Mortgage Bankers Association’s seasonally adjusted index.

The average contract interest rate for 30-year fixed-rate mortgages with a conforming loan balance ($726,200 or less) increased from 7.09% to 7.16%, decreasing from 0.70 points (including origination fee) to 0.68 for loans with a 20% reduction Have become. Payment. This was the third consecutive weekly increase and the highest level since October 2022, also matching the high seen in 2001.

“Fiscal rates were raised again last week following mixed data on inflation and more signs of resilience in the economy, posing a challenge to the Federal Reserve’s efforts to reduce inflation,” MBA economist Joel Kahn said in a release. Can do.”

As a result, mortgage demand from home buyers remained essentially flat week over week and was down 26% compared to the same week a year ago. The adjustable-rate share of these applications grew slightly, as ARM loans offer slightly lower rates, and buyers are looking for an opportunity where they can find it.

Applications for home loan refinance declined 2% this week and were down 35% compared to the same week a year ago. Last year the 30-year rate was 5.45%, but the year before that it was in the 3% range, so there are fewer borrowers who could benefit from refinancing now.

According to a separate MBA report released Tuesday, while overall mortgage demand is declining, applications for mortgages to buy newly constructed homes are rising, up 35.5% year-over-year in July. The Federal Housing Administration’s share of those applications reached its highest level since May 2020 and has increased in four of the past five months. FHA loans offer low down payment options and are thus popular among first-time home buyers.

“This rising trend in FHA shares is indicative of first-time buyers looking to new homes as an option, given the lack of inventory for sale among existing homes and challenging affordability conditions,” Kahn said.

Mortgage rates continued to rise this week. According to Mortgage News Daily, the average rate on the 30-year fixed rate hit 7.26% on Tuesday, the highest it has been since last November.

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