Mortgage applications are down due to concerns about COVID and rising interest rates.
Due to increased COVID instances and unpredictable lending rates, the hot housing market may be faltering after riding high since January.
According to a study released by the Mortgage Bankers Association on Wednesday, mortgage applications fell 4% for the week ending July 16 after a 16 percent increase the week before.
“The 10-year Treasury yield dropped substantially last week, in part because to investors becoming more concerned about the proliferation of COVID variations and their impact on global economic growth,” says Joel Kan, MBA’s associate vice president of economic and industrial forecasting.
“As a result, mortgage rates changed in a mixed manner, with the 30-year fixed rate rising slightly to 3.11 percent following two weeks of reductions. Other studied rates fell, with the 15-year fixed rate loan, which accounts for roughly 20% of refinance borrowers, falling to 2.46 percent, its lowest level since January 2021,” he added.
Refinances, on the other hand, surged to 64.9 percent of total mortgage applications, up from 64.1 percent the week before.
ARM mortgage applications fell to 3.3 percent of total applications, while FHA applications increased 0.1 percent to 9.6 percent, up from 9.6 percent a week before. According to the MBA study, VA mortgages increased from 10.3 percent to 10.5 percent this week, while USDA mortgages remained steady at 0.5 percent.
The average 30-year fixed-rate mortgage with conforming loan sums increased to 3.11 percent this week, while 30-year fixed-rate mortgages with jumbo loan balances fell to 3.13 percent.
Also falling were 30-year fixed-rate mortgages backed by the Federal Housing Administration, which fell to 3.08 percent.
A 15-year fixed-rate mortgage declined from 2.48 percent to 2.46 percent, while 5/1 ARMs fell from 3.02 percent to 2.74 percent.
Concerns that a rise in COVID cases in the United States may derail the economic recovery have posed a threat to the market’s development, as specialists warn of a new wave of infections and deaths from the Delta strain, which currently accounts for 83 percent of all new virus cases.