According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates increased last week. Rates moved higher for 30-year fixed-rate loans with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. But while increasing rates slowed refinance activity, demand for loans to buy homes still posted week-over-week gains. In fact, the purchase index rose 1 percent from one week earlier. Joel Kan, MBA’s associate vice president of economic and industry forecasting, said the improvement was a promising sign. “In a promising sign of strong purchase demand amidst affordability challenges, both conventional and government purchase applications increased,” Kan said. The MBA is forecasting slower mortgage originations this year, since inflation is likely to cause more aggressive action from the Federal Reserve. However, they still believe purchase originations will beat last year’s pace. In fact, according to their outlook, purchase loan demand will rise 4 percent this year. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)
