With a handful of weeks of consistent rate raises, it’s no surprise that mortgage and refinance applications have decreased. According to the Mortgage Bankers Association weekly survey, mortgage apps fell 13.3 percent for the week ending February 17.
The Refinance Index decreased 2 percent from the previous week and was 72 percent lower than the same week one year ago.
“Mortgage rates increased across all loan types last week, with the 30-year fixed rate jumping 23 basis points to 6.62 percent—the highest rate since November 2022. The jump led to the purchase applications index decreasing 18 percent to its lowest level since 1995,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “This time of the year is typically when purchase activity ramps up, but over the past two weeks, rates have increased significantly as financial markets digest data on inflation cooling at a slower pace than expected. The increase in mortgages rates has put many homebuyers back on the sidelines once again, especially first-time homebuyers who are most sensitive to affordability challenges and the impact of higher rates.
“Refinance applications declined last week and remained more than 70 percent behind last year’s pace,” added Kan. “Given that rates are over 2.5 percentage points higher than a year ago, we expect that refinance activity will remain depressed for some time.”