Key Takeaways
- The 30-year, fixed-rate mortgage came in at 6.73%, the highest levels since July, data from theĀ Mortgage Brokers Association showed.
- Mortgage demand was flat, as fewer borrowers sought to refinance, but purchase activity increased.
- The rise in mortgage rates comes as Treasury yields were also moving higher.
Mortgage rates climbed for the fourth time in five weeks to reach their highest levels since July.
The Mortgage Brokers Association reported that the 30-year, fixed-rate mortgage increased to 6.73% for the week ending Oct. 25. Since hitting a recent low in September, mortgage rates have increased by nearly 0.6 percentage points.
The rise in borrowing costs comes as Treasury yields hit their highest levels since July, with the 10-year Treasury note pushing above 4.2% in recent days.Ā The 10-year Treasury is one of the major factors that influence mortgage rates.
Mortgage Demand is Depressed as Rates Rise
Because of interest rate increases, mortgage demand remained relatively flat, as the volume of mortgage applications decreased marginally from the prior week amid the rise in mortgage rates.Ā
However, the recent spike in borrowing costs is creating a reversal in recent home loan trends; refinancing activity is declining after surging in the summer. Refinancing fell by 6% when compared with the prior weekās totals, though it is still far higher than a year ago when mortgage rates were even higher.Ā
Meanwhile, purchasing activity remained elevated, coming in 4% higher than last weekās figures and was 10% better than the same period last year.
The increase in purchase activity comes as more houses are listed for sale. A recent study by Realtor.com showed that the number ofĀ home listings was up more than 11%Ā to hit a three-year high.Ā
āWe continue to expect housing demand from younger homebuyers to support purchase growth over the next few years as for-sale inventory loosens gradually,ā said Joel Kan, MBA vice president and deputy chief economist.