Interest Rates Rise, Along With Mortgage Applications

The highest interest rates in ten months did not discourage home buyers and refinancing homeowners in the January 12 week, with purchase applications for home mortgages rising by a seasonally adjusted 3 percent from the prior week and applications for refinancing by 4 percent. Unadjusted, the purchase index rose 35 percent from the previous week and was 7 percent higher than the same week a year ago. The refinance share of mortgage activity fell by 0.7 percentage points to 52.9 percent. Rates rose sharply, with the average interest rate on 30-year fixed-rate conforming mortgages ($453,100 or less) up 10 basis points to 4.33 percent, the highest level since March 2017. Despite the headwind of higher mortgage rates, purchase applications are back up to a strong 7 percent year-on-year gain pace, confirming the continuation of the robust housing market strength seen in the last quarter.