US: mortgage applications down 1.5 per cent, rates at their highest since 2024

(Il Sole 24 Ore Radiocor) - Last week, mortgage rates reached their highest level since 2024, causing a further fall in demand for loans and prompting more borrowers to opt for riskier mortgages. The total volume of mortgage applications fell by 1.5 per cent compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. The average contracted interest rate for 30-year fixed-rate mortgages rose to 7.12 per cent, up from 6.97 per cent previously. Mortgage refinancing applications fell by 3% over the week and were 62% lower than in the same week a year earlier. This is the lowest level since February 2025. The rate for 30-year fixed-rate mortgages was 78 basis points – or more than three-quarters of a percentage point – lower than in the same period last year. Applications for mortgages to buy a home fell by 1 per cent over the week and by 11 per cent compared with the same period last year. The autumn property market, usually the second busiest after the spring market, is now in full swing, but estate agents are already noticing a marked slowdown due to rising interest rates. Buyers and property owners are also looking to save money wherever possible, including through variable-rate mortgages, which are considered riskier, reports CNBC. “With fixed rates much higher, a greater number of borrowers have opted for adjustable-rate mortgages (ARMs), with the share of ARMs reaching 9.8 per cent,” said Mike Fratantoni, senior vice-president and chief economist at the MBA. The share of ARMs in total applications the previous week was just 8.4 per cent.

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