Mortgage applications, interest rates rise first week of January 2022: Massachusetts Homeownerhsip Homebuyers

 Mortgage applications rose 1.4 percent on a seasonally adjusted basis during the first week of the year, while the average 30 year fixed rate mortgage jumped 19 basis points week over week to 3.52 percent  its highest level since March 2020, the Mortgage Bankers Association said, citing its Market Composite Index. The average contract interest rate for 30 year fixed rate mortgages backed by the Federal Housing Administration increased to 3.50 percent from 3.40 percent, and the average contract interest rate for a 15 year fixed rate mortgage rose to 2.73 percent from 2.6 percent.

 The average contract interest rate for 30 year fixed rate mortgages with jumbo loan balances of more than $647,200 increased to 3.42 percent from 3.31 percent. On an unadjusted basis, the market composite index, which measures mortgage-loan application volume, jumped 46 percent. The refinance index, meanwhile, slid 0.1 percent from the previous week and was down 50 percent from the same week a year ago. The refinance share of mortgage activity decreased to 64.1 percent of total applications from 65.4 percent the previous week. The seasonally adjusted purchase index gained 2 percent from the previous week, while the unadjusted purchase index climbed 51 percent and was 17 percent lower than one year ago.

 “Mortgage rates increased significantly across all loan types last week as the Federal Reserve’s signaling of tighter policy ahead pushed U.S. Treasury yields higher,” MBA associate vice president of economic and industry forecasting Joel Kan said in a press release. “Rates at these levels are quickly closing the door on refinance opportunities for many borrowers. Although refinance activity changed little over the week, applications remained at their lowest level in over a month, and conventional refinance applications were at their lowest level since January 2020.”

 The adjustable rate mortgage share of activity slid to 3.1 percent of total applications. The FHA share of total applications increased to 9.9 percnent from 9.2 percent in the preceding week, while the VA share of applications rose to 11.4 percent from 11.3 percent. The USDA share of applications was flat at 0.4 percent. “MBA expects solid growth in purchase activity this year, as demographic drivers and the strong economy support housing demand,” Kan added. “However, the strength in growth will be dependent on housing inventory growing more rapidly to meet demand.”

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