The numbers: Mortgage applications fell as rates rose across the board.
With the 30-year mortgage hitting the highest level since early December 2023, demand took a hit.
The overall market composite index — a measure of mortgage application volume — fell in the last week, according to the Mortgage Bankers Association (MBA) said on Wednesday.
The market index fell 2.3% to 205.1 for the week ending Feb. 9 from a week ago. A year ago, the index stood at 214.9.
Key details: The purchase index — which measures mortgage applications for the purchase of a home — fell 2.5% from a week ago.
The refinance index fell 2.1%, as homeowners found little incentive to do so.
The average contract rate for the 30-year mortgage for homes sold for $726,200 or less was 6.87% for the week ending Feb. 9. That’s up from 6.8% from the week before.
The rate for jumbo loans, or the 30-year mortgage for homes sold for over $726,200, was 7%, down from 6.88% the previous week.
The average rate for a 30-year mortgage backed by the Federal Housing Administration was down to 6.68% from 6.57%.
The 15-year rose to 6.53% from 6.41% from the previous week.
The rate for adjustable-rate mortgages fell to 6.3% from last week’s 6.14%.
The big picture: Forecasters and home buyers expect mortgage rates to be lower by now, but that has failed to materialize as the Federal Reserve holds off on rate cuts until May.
And with stronger-than-expected economic data on the job market and inflation, markets are reacting negatively, which could influence and keep mortgage rates elevated. That in turn makes it more expensive to buy a home with a mortgage for the time being.
What the MBA said: “Purchase applications remained subdued as elevated rates continue to add to affordability challenges along with still-low existing housing inventory,” Joel Kan, vice president and deputy chief economist at the MBA, said in a statement.
Market reaction: The yield on the 10-year Treasury note
BX:TMUBMUSD10Y
was over 4.3% in early morning trading Wednesday.
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