Mortgage applications fell 7.7% in the week ended Feb. 10 as mortgage rates rose after five weeks of declines, the Mortgage Bankers Association said, citing its Weekly Mortgage Applications Survey.
The average contract interest rate for conforming 30-year mortgages of $726,200 or less jumped to 6.39% from 6.18% the week before, while the rate for 30-year fixed-rate mortgages backed by the FHA climbed to 6.25% from 6.14%.
At the same time, MBA’s refinance index fell 13% from the week before, as the refinance share of mortgage activity decreased to 32% of mortgage applications from 33.9% in the preceding week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances of more than $726,200 increased to 6.26% from 5.96%, and the average contract interest rate for a 15-year fixed-rate mortgage increased to 5.85% from 5.64%.
“Mortgage rates increased across the board last week, pushed higher by market expectations that inflation will persist, thus requiring the Federal Reserve to keep monetary policy restrictive for a longer time,” MBA Vice President and Deputy Chief Economist Joel Kan said in a news release. “Potential buyers remain quite sensitive to the current level of mortgage rates, which are more than two percentage points above last year’s levels and have significantly reduced buyers’ purchasing power.”