Latest news with #MortgageBankersAssociation
CNBC
a day ago
- Business
- CNBC
Mortgage demand drops to lowest level since May, as interest rates stall
Mortgage interest rates have barely moved in several weeks, but rates are not what is weighing on consumers most. It's really uncertainty about the economy that worries people more. That is keeping some from making big financial decisions. As a result, total mortgage application volume dropped 3.8% last week compared with the previous week, according to the Mortgage Bankers Association's seasonally adjusted index. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $806,500 or less, decreased to 6.83% from 6.84%, with points decreasing to 0.60 from 0.62, including the origination fee, for loans with a 20% down payment. "Mortgage applications fell to their lowest level since May, with both purchase and refinance activity declining over the week," said Joel Kan, MBA's vice president and deputy chief economist. "There is still plenty of uncertainty surrounding the economy and job market, which is weighing on prospective homebuyers' decisions." Applications for a mortgage to purchase a home dropped 6% for the week and were 17% higher than the same week one year ago. Volume, however, is so low that the annual comparison is skewing deceptively high. "Applications for conventional, FHA, and VA purchase loans fell, despite slowing home-price growth and increasing levels of for-sale inventory in many regions," said Kan. CNBC's Property Play with Diana Olick covers new and evolving opportunities for the real estate investor, delivered weekly to your inbox. Subscribe here to get access today. Applications to refinance a home loan fell 1% for the week and were 30% higher the same week one year ago. Overall refinance volume is also historically low. That is the third straight week of declines in refinancing. Last year, mortgage rates were just one basis point lower, so essentially the same. Mortgage rates fell very slightly to start this week, but could see a bigger change in either direction following the Federal Reserve's announcement on interest rates Wednesday and Chairman Powell's commentary. The next big driver will be Friday's release of the government's monthly employment report.
Yahoo
a day ago
- Business
- Yahoo
Will mortgage rates go up to 7%? Signs to watch for.
Are mortgage rates slowly rising to 7%? We are very close to it right now, and, historically speaking, it's not foreign territory. In fact, 7.71% is the 54-year average for 30-year fixed mortgage rates, according to Freddie Mac. So rates would have to move even higher just to meet the long-term mean. So, are 7% mortgage interest rates in the cards? And if so, how soon? Learn more: Historical mortgage rates — How do they compare to today's rates? This embedded content is not available in your region. Recent history of 7% mortgage rates The 30-year home loan rate has been in 7% territory many times over the past four years. According to Freddie Mac, mortgage rates already edged above 7% (7.04%) for one week this year — in January 2025. They stepped over 7% for six weeks in 2024, 17 weeks in 2023, and twice in 2022. Before that, it had been 20 years since mortgage rates were last above 7%. Mortgage rate forecasts miss 7%, just barely The July 2025 forecast by the Mortgage Bankers Association (MBA) calls for 30-year home loan rates to be near 6.7% by the end of the year. From there, the MBA expects rates to be incrementally lower — near 6.6% — for the first half of 2026. An incremental decline to 6.5% is forecast for the third quarter of 2026, then 6.4% by the end of next year. Meanwhile, Fannie Mae expects mortgage rates to end 2025 near 6.5% and 2026 at 6.1%. And predicts rates to be down slightly to 6.4% by the end of this year. So, if the forecasts hold, we may miss hitting 7% home loan rates in the near future, but there's little room for error. Dig deeper: When will mortgage rates go down significantly? Up Next Up Next A half-point move is worth $100 a month and $35,000 in interest Now, let's consider the impact of 30-year fixed mortgage rates ranging from 6%, 6.5%, and 7% on a $300,000 mortgage loan. (Numbers have been rounded to the nearest dollar.) The difference in a $300,000 mortgage at 6.5% and 7% would mean an increase of about $100 to your monthly payment, and more than $35,000 in additional interest over the life of the loan. Conversely, if rates were to fall from 6.5% back down to 6%, you would save about $100 a month and about $35,000 in interest. A real predictor of where mortgage rates are going One of the easiest and most reliable ways to track upcoming movements for mortgage rates is to follow the 10-year Treasury note. It's very much a barometer of where home loan rates are headed. You can quickly and easily check it by bookmarking Yahoo Finance's 10-year Treasury chart. If you see a trend of the 10-year moving lower, you can expect to see that momentum eventually transfer to mortgage rates. A pattern of higher Treasury yields? Look for mortgage rates to follow. Why this happens: Fixed mortgage rates have a lot in common with 10-year Treasury yields. They both are long-term instruments. While a home loan is typically structured to last 30 years, U.S. homeowners typically keep a mortgage for less than 12 years. Lenders often use the 10-year as a baseline for pricing a loan by adding a profit margin to it. What might cause interest rates to rise to 7%? It won't take much to move mortgage rates up to 7%, but here are signs for you to watch for: As mentioned above, look for rising 10-year Treasury bond yields. Watch for news of increasing consumer costs, whether from tariffs or otherwise. That would be termed "rising inflation." Listen for talk of higher government debt. This will often be characterized as increasing "deficit concerns." Monitor investor enthusiasm regarding stocks. In a rising stock market, traders often leave bonds behind. In a bond market sell-off, yields rise. Learn more: How are mortgage rates determined? The timeline for mortgage rates to go up to 7% With rates so close to 7% already, a move over the line can happen quickly. With the right combination of circumstances, we could be just four weeks away from 7% mortgage rates. That's how long it took for rates to climb from 6.72% to 7.04% back in late December to mid-January. Or, we could be just eight weeks away from a mortgage rate close to 6% as happened in August, September, and October 2024. Mortgage rates are unpredictable like that. Keep reading: What happens if mortgage rates go up to 8%? Will mortgage rates go up to 7%? FAQs Is 7% a high interest rate? It is if you have 3% mortgage rates ingrained in your mind. However, the average mortgage rate over the past 54 years is 7.71%. Of course, that's like comparing the average cost of a gallon of milk over 50 years, which was $1.57 in 1975 (not adjusted for inflation), and is around $4 today. When buying a house today, you probably don't care what prices and interest rates were 50 years ago. Still, no — 7% is not a particularly high mortgage rate. Will mortgage rates ever go back to 3%? Will milk ever be $1.57 again? The analogy is wearing thin, though, right? Mortgage rates reached historic lows of sub-3% in the height of the COVID-19 pandemic and prolonged economic stress. It's likely we'll all be in another mask of some kind when 3% home loans come back. What will mortgage rates do in the next 5 years? No official source, such as Fannie Mae, Freddie Mac, or the Mortgage Bankers Association, dares to make predictions that far out into the future. There is simply no way to estimate the state of the world or the national economy in five years. Think of it this way: Are you sure where you'll be living in five years? Laura Grace Tarpley edited this article.
Yahoo
7 days ago
- Business
- Yahoo
Mortgage rates hold steady at 6.74%
Mortgage rates remained basically flat this week, following two straight weeks of increases. According to data from Freddie Mac, the average rate on a 30-year fixed mortgage was 6.74% for the week ending Wednesday, down just a single basis point from 6.75% the week prior. The average 15-year fixed mortgage rate was 5.87%, down five basis points from 5.92% last week. Read more: Will mortgage rates ever be 3% again? 'Overall, the backdrop for the housing market is positive as the economy continues to perform well with solid employment and income growth,' said Sam Khater, Freddie Mac's chief economist. Applications to purchase a home were up 3% from a week ago, according to data from the Mortgage Bankers Association, while refinancings fell 3%. 'We expect overall demand to ebb and flow as long as mortgage rates remain volatile due to the ongoing economic uncertainty,' said Bob Broeksmit, MBA CEO and president. Sign up for the Mind Your Money weekly newsletter By subscribing, you are agreeing to Yahoo's Terms and Privacy Policy As mortgage rates remain elevated, home sales could hit an all-time low this year. According to research by sales volume for existing homes is expected to fall 1.5% annually, to just 4 million transactions. At the start of 2025, sales volume for homes had been expected to increase slightly from last year's level of 4.06 million — another all-time low. Sign up for the Mind Your Money newsletter Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Miami Herald
7 days ago
- Business
- Miami Herald
The Mortgage Rate Shift That Could Change the Housing Market
Owning a home remains prohibitively expensive for many Americans, but experts believe a modest decline in mortgage rates could inject much-needed momentum into home sales and help revive the broader U.S. housing market. According to recent analysis from the National Association of Realtors (NAR), were mortgage rates to drop to 6 percent, an additional 5.5 million households would be able to afford a home, including 1.6 million renters. Affordability remains one of the key issues threatening the stability of the U.S. housing market. As experts have warned, the rising costs of buying a home-which have dragged ownership rates to a post-pandemic low this year-are exacerbated by persistently high borrowing costs, preventing a large number of Americans from entering the property market. Economists have recently pointed to higher-than-usual mortgage rates as a critical drag on the U.S. housing market, and others are now dubbing a possible drop to 6 percent as a "magic" figure that would expand the number of Americans who are able to buy. According to data from key organizations within the housing and mortgage markets, including the Mortgage Bankers Association (MBA) and the Federal Home Loan Mortgage Corporation (Freddie Mac), 30-year fixed mortgage rates are currently hovering at around about 6.75 percent. While these are below the levels seen in October 2023, when 30-year rates surged to around 8 percent, they are a far cry from the lows of under 3 percent during the pandemic. The rates have pushed homeownership out of reach for many. According to Housing Market Trends Report for June, the number of homes for sale in the U.S. rose nearly 30 percent year over year, marking the 20th straight month of increases. The latest market report from Zillow similarly showed that housing inventory hit a five-year high in June. NAR's research found that even a modest drop in rates to 6 percent would boost home sales by an estimated 3 percent in 2025 and by 14 percent in 2026. It added that approximately 10 percent of the additional households now able to buy would do so over 12 to 18 months. According to Mortgage News Daily's loan calculator, a 6 percent rate on 30-year mortgages would lower the monthly payment on a $300,000 loan to $1,799 from $1,946 at today's rates. NAR said that Atlanta, Dallas, Minneapolis, Cleveland, and Kansas City would see the greatest increase in home sales activity if rates dropped to 6 percent. Susan Wachter, an economist and professor of finance and real estate at the University of Pennsylvania's Wharton business school, told Newsweek that 6 percent could prove "a magic mortgage number that will push Americans to buy." However, she added that this will depend on the direction of inflation, and the Federal Reserve's response in the form of lower interest rates. Alexei Morgado, real estate agent and founder of Lexawise, told "Many of my clients tell me the same thing: They want to buy, but they feel that mortgage rates are holding them back." "And it's not just about the number itself," he continued. "What I hear most often is the fear of making a bad decision, of getting into something they can't sustain or that will later make them think, 'I rushed into it.' That feeling of paying more for the same thing is frustrating, discouraging, and puts them on hold." Susan Wachter of theUniversity of Pennsylvania's Wharton School told Newsweek: "Six percent could be a magic mortgage number that will push Americans to buy, but only if it comes about because inflation declines, bringing interest rates down, without a recession. The fear of buyers' remorse in a housing slowdown is sidelining buyers, including those who would newly qualify for a mortgage with rate drops." NAR Chief Economist Lawrence Yun, speaking to real estate professionals at the Residential Economic Issues & Trends Forum last month, said: "Your past clients are all happy. But for new homebuyers, their monthly payment obligation has increased, and this is what's killing the housing market. Mortgage rates are the magic bullet, and we're waiting and waiting until those come down." NAR Chief Economist Yun forecasts that mortgage rates will average 6.4 percent in the second half of 2025, and 6.1 percent next year. Related Articles Map Shows Cities Where Residents Are Looking to Move AwayYou Can Now Co-Own a 6-Bed Montecito MansionHow Tax Breaks for Homeowners Can Affect Your 2025 ReturnsHow Much Boomers, Millennials and Gen Z Spent on Their Homes in 2024 2025 NEWSWEEK DIGITAL LLC.
CNBC
23-07-2025
- Business
- CNBC
Mortgage demand flatlines at low levels, as mortgage rates hit 4-week high
Mortgage rates rose last week to the highest level in four weeks, but mortgage demand didn't really move. Total mortgage application volume increased 0.8% last week from the previous week, according to the Mortgage Bankers Association's seasonally adjusted index. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $806,500 or less, increased to 6.84% from 6.82%, with points remaining unchanged at 0.62, including the origination fee, for loans with a 20% down payment. Applications to refinance a home loan, which are most sensitive to weekly rate moves, fell 3% for the week and were 22% higher than the same week one year ago, when interest rates were just 2 basis points lower. While the annual jump may seem large, that's only because the volume is so very small. Applications for a mortgage to purchase a home rose 3% for the week and were also 22% higher than the same week one year ago. "After reaching $460,000 in March 2025, the purchase loan amount has fallen to its lowest level since January 2025 to $426,700," said Joel Kan, an MBA economist. "With the 30-year fixed rate still too high to benefit many borrowers, refinance applications were down almost three percent for the week." CNBC's Property Play with Diana Olick covers new and evolving opportunities for the real estate investor, delivered weekly to your inbox. Subscribe here to get access today. Mortgage rates moved slightly lower to start this week, according to a separate survey from Mortgage News Daily. Markets reacted positively Tuesday morning to details from Treasury Secretary Scott Bessent's thoughts on whether or not Federal Reserve Chairman Jerome Powell would leave office early. Last week, bond yields rose on concerns he might. "In not so many words, Bessent told Trump not to fire Powell and this morning's [Tuesday's] coverage just expanded on that sentiment," wrote Matthew Graham, chief operating officer of Mortgage News Daily. "The Bessent news helped the bond market begin the day in stronger territory."
