In a recent turn of events, US mortgage rates have resumed their upward trajectory after a two-week period of decline. This development comes as mortgage applications registered a decrease, according to the latest Mortgage Bankers Association (MBA) weekly survey.
Freddie Mac (https://freddiemac.gcs-web.com/news-releases/news-release-details/30-year-fixed-rate-mortgage-reverts-last-week) that the average interest rate for a 30-year fixed loan increased to 6.39% from last week’s 6.35% as of May 18, 2023. Although there is strong buyer demand in some US cities, high borrowing expenses and a shortage of available homes are restricting purchases in many markets. In April, transactions for pre-owned homes reached a three-month (https://www.nar.realtor/newsroom/existing-home-sales-faded-3-4-in-april) low due to limited inventory.
In the meantime, the MBA’s weekly survey (https://www.mba.org/news-and-research/newsroom/news/2023/05/17/mortgage-applications-decrease-in-latest-mba-weekly-survey) revealed a decrease in mortgage applications. The Market Composite Index, which gauges the volume of mortgage loan applications, saw a 5.7 percent decline on a seasonally adjusted basis compared to the previous week. In the details, the seasonally adjusted Refinance Index dropped by 7.7 percent from the previous while the Purchase Index decreased by 4.8 percent compared to one week earlier. This decline suggests a possible slowdown in the demand for home loans for the week ending May 12, 2023.
