Mortgage demand rises in recent weeks despite loans becoming more expensive

Number: Demand for home loans increased even though mortgage rates rose again.

Demand for mortgages rose 7.4% in the most recent week as interest rates remain at the highs last seen in November.

Demand for both purchases and refinancing increased. The Mortgage Bankers Association (MBA) said Wednesday that this boosted its market aggregate index, a measure of mortgage application volume.

The market index for the week ending March 3 was up 7.4% from the previous week to 201.5. A year ago, this index was 502.5.

The previous week’s data has been corrected and last week’s index was 187.6.

Key details: The refinancing index rose 9.4%, down 76% from a year ago.

The Purchase Index, which measures mortgage applications for home purchases, rose 6.6% from last week.

The average acceptance rate for 30-year mortgages for homes sold under $726,200 was 6.79% in the week ending March 3.

That’s up from 6.71% the week before, according to MBA.

For homes sold above $726,200, the 30-year average rate was 6.49%, up from 6.44% the week before.

15-year maturities rose to 6.25% from last week’s 6.13%.

price variable rate mortgage It rose to 5.75% from last week’s 5.73%.

Big picture: Higher interest rates are keeping homebuyers waiting. However, those who can avoid the fee, such as cash buyers and those who absolutely need to move, may still be active and appear in the data.

But in general, higher interest rates could hit home sales, as they do in the fourth quarter of 2022.

MBA comments: Joel Kan, MBA’s vice president and deputy chief economist, said, “Even with higher interest rates, there was an increase in applications last week, but this is consistent with a decline to a very low level in two weeks, including the holiday week. It’s a comparison,” he said.

“Purchase applications are still down 42%,” he added. “Many borrowers are sitting on the sidelines as interest rates go down,” he said.

Market reaction: 10 year government bond yield

It rose above 3.99% in early Wednesday trading.

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