Last year the 30-year fixed was 5.45%, and in 2021, it was in the 3% range, showing just how far costs have risen since the Federal Reserve began raising rates.
Mortgage rates rose for the third straight week last week, matching a 22-year high. As a result, mortgage demand dropped as well.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances increased to 7.16% from 7.09%, with points decreasing to 0.68 from 0.70 for loans with a 20% down payment. That was the third straight weekly increase and the highest level since October 2022, which also matches a high level seen in 2001.
As a result, mortgage demand from homebuyers was essentially flat week to week and 26% lower than the same week one year ago. The adjustable-rate share of these applications did rise slightly, as ARM loans offer slightly lower rates, and buyers are looking for a break where they can find it. While overall mortgage demand is dropping, applications for a mortgage to purchase a newly built home are rising, up 35.5% in July year over year, according to a separate MBA report released Tuesday. The Federal Housing Administration share of those applications hit the highest level since May 2020 and has increased in four of the last five months. FHA loans offer low down payment options and are thus popular with first-time homebuyers.
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