In the week leading up to the Federal Open Market Committee meeting, mortgage applications finally ticked up.
Last week, purchase applications increased for both conventional and FHA loans but remained 26% lower than the same week a year ago. Meanwhile, refinance applications also increased but are still about 30% lower than the same week last year.
“Mortgage applications increased last week, despite the 30-year fixed rate edging back up to 7.31%, its highest level in four weeks,” Joel Kan, MBA’s vice president and deputy chief economist said.
Also noteworthy, the average loan size on a purchase application was $416,800, the highest level in six weeks.
“Home prices in many markets have been supported by low inventory and resilient housing demand for available homes,” Kan added.
The refinance share of mortgage activity increased to 31.6% of total applications from 29.1% the previous week. Meanwhile, the adjustable-rate mortgage (ARM) share of activity decreased to 7.2% of total applications from 7.5% last week.
The 30-year fixed mortgage rate increased to 7.31% last week, according to Kan. At HousingWire’s Mortgage Rates Center, Optimal Blue had 30-year fixed-rate mortgage at 7.19% on Sunday. At Mortgage News Daily, 30-year fixed-rate mortgage rates were at 7.30% on Tuesday.
The Federal Housing Administration loans’ share remained unchanged at 14.2%. As homebuyers continue to face higher rates and limited for-sale inventory, purchase conditions are becoming more challenging for buyers. The U.S. Department of Veteran Affairs loans’ share decreased to 11% from 11.3% the week prior. Lastly, the U.S. Department of Agriculture loans’ share remained unchanged at 0.4%.
The average contract interest rate for 5/1 ARMs dropped to 6.42% from 6.59% a week prior.
The FOMC is expected to hold rates steady on Wednesday, though analysts believe one more rate hike remains in the cards this year.