Home Loan has dropped to its lowest level in 22 years, as interest rates rise

• The 30-year fixed-rate mortgage average contract interest rate for conforming loan sums of $647,200 or less jumped to 5.40 percent from 5.33 percent.
• Mortgage applications for house purchases declined 7% for the week and were 21% lower than the same week last year.
• Refinance demand decreased 6% for the week and was down 75% year on year.

Home Loan and Mortgage rates are rising again following a brief drop in May, and the housing market continues to suffer from a lack of listings. As a result, mortgage demand is low.

According to the Mortgage Bankers Association’s seasonally adjusted index, total mortgage application volume declined 6.5 percent last week compared to the prior week. Demand fell to its lowest level in 22 years.

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The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $647,200 or less climbed to 5.40 percent from 5.33 percent, with points increasing to 0.60 percent from 0.51 percent (including the origination fee) for loans with a 20% down payment.

Refinance demand, which is most sensitive to weekly rate movements, declined a further 6% this week and was 75% lower than the same week last year. The vast majority of mortgage holders currently have rates that are significantly lower than the present rate, and those who want to take cash out of their houses are opting for second mortgages rather than refinancing their first liens.

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“While rates were still lower than they were four weeks ago, they remained high enough to still suppress refinance activity. Only government refinances saw a slight increase last week,” said Joel Kan

Mortgage applications for house purchases declined 7% for the week and were 21% lower than the same week last year.Home Loan