Refinance requests rose 12% in a week, after the price of 30-year fixed-rate loans, where 17% a year ago last week returned to its lowest level in six weeks.
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A weekly survey of lenders by the Mortgage Bankers Association shows that modest pullbacks on mortgage interest rates are increasing interest in refinancing, while the rise in home prices and combination of fees is curbing demand for home buyers .
According to the MBA survey, purchase loan requests have declined seasonally by 4% compared to last week, and have not changed in nature since a year ago.
As the rates for 30-year fixed-rate loans were retracted to the lowest level in six weeks, 12% of applications for refinance in one week, and 17% from a year ago, according to Joel Kang, the MBA’s assistant chief economist. It has risen.
Joel Kang
“Purchase activity has been a tougher week, with all loan types declining,” Kang said in a statement. “The average loan size for purchase loans has increased since the start of the year, reaching $447,300 last week, the highest level since October 2024, due to weak government purchasing activities.”
As a result, refinance requests accounted for 39% of all mortgage applications last week, up from 37% the previous week.
Following a 2024 low of 6.03% on September 17, rate lock data tracked in optimal blue, the 30-year fixed-rate fit mortgage rate reached 7% for the first time since May 2024. It rose above and beyond.
A modest pullback with a rating
Though 30-year fixed-rate mortgage fees have returned modestly from their 7.05% high in 2025 on January 14th, mortgage industry economists have been hoping to see how they can get their mortgage loans for the rest of the year. We expect interest rates to continue to rise. Sales of existing homes will be recharged after reaching lowest levels in 30 years of 2024.
After reaching its post-pandemic peak of 7.2% in June 2022, annual inflation fell to 2.1% in September, allowing the Fed to cut three times in the final months of 2024.
Inflation proven to be stubborn
However, inflation has proven to be more stubborn since then, dating back to 2.6% in December, according to the latest reading of the Fed’s preferred inflation gauge, the Personal Consumption Expense (PCE) price index.
On January 29, the Fed held back further interest rate cuts and continued its “quantitative tightening” which puts upward pressure on fees by reducing government bonds and mortgage obligations from central bank books. did.
The futures market tracked by the CME FedWatch tool shows investors don’t expect the Fed to start cutting again until June, but the economists at Pantheon Macroeconomics have said many investors are aware of it. I believe the economy is cooling faster than it is.
Employers expanded their employment in the last month of 2024, down 566,000 from November to December, bringing employment to 7.6 million people, according to data released Wednesday.
According to the December job opening and labor turnover overview (Jolts), job openings have decreased by 1.3 million times over a year ago.
“A December Jolts report suggests [Fed policymakers] The Pantheon Macroeconomics economist said on the US Economic Monitor on February 5th.
Forecasters at Pantheon Macroeconomics predict that 10-year Treasury bond yields will fall to 3.75%, three-quarters, three-quarters, by the end of the year. If mortgage interest rates follow, that means the rate for a 30-year fixed-rate mortgage will drop to around 6.2%.
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