Mortgage rates reached their highest level since early May, impacting mortgage demand for the second consecutive week. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances increased slightly to 7.07% from 7.05%, with points rising to 0.65 from 0.63 for loans with a 20% down payment.

Key Points:

• Refinance Applications:
  • Fell 7% from the previous week.
  • Were 5% higher than the same week one year ago.
  • Some borrowers are refinancing to pull out home equity despite higher rates.
• Purchase Applications:
  • Dropped 4% for the week.
  • Were 16% lower than the same week a year ago.
  • High interest rates and rising home prices are significant hurdles for buyers.
  • Government purchase volume saw less decline, driven by growth in VA applications, supporting first-time homebuyer demand.

Market Insights:

Mike Fratantoni, Senior VP and Chief Economist at the Mortgage Bankers Association (MBA), explained, "Mortgage rates moved slightly higher last week despite incoming data indicating somewhat slower economic growth."

Matthew Graham of Mortgage News Daily commented on the influence of job market data on interest rates: "Lower job openings connote lower rates, all other things being equal." He also noted the potential volatility depending on upcoming economic data.

Current Housing Market Context:

In Austin, Texas, home sales have declined for the second consecutive month due to high mortgage rates. Competition remains intense, especially for lower-end properties.

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