Mortgage Application Rates Down as Interest Rates Rise to Highest Levels Since July Mortgage application rates in the United States fell by 1.1 percent last week driven by higher interest rate, according to the Mortgage Bankers Association (MBA) Composite Index.

By The Epoch Times

This story originally appeared on The Epoch Times

Mortgage application rates in the United States fell by 1.1 percent last week driven by higher interest rate, according to the Mortgage Bankers Association (MBA) Composite Index.

The previous week ending Sept. 10 saw applications increase by 0.3 percent in contrast to the week ending Sept. 24.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of up to $548,250 or less increased to 3.10 percent from 3.03 percent. Points, including origination fee, increased from 0.30 to 0.34 for 80 percent loan-to-value ratio loans (loans with a downpayment of 20 percent).

Meanwhile, the average contract interest rate for 15-year fixed-rate mortgages increased from 2.34 percent to 2.43 percent. Points, including origination fee, increased from 0.24 to 0.29 for loans with a downpayment of 20 percent.

Applications to refinance a home loan also fell 1 percent from the previous week and were just 0.4 percent higher than the same week in 2020.

Meanwhile, the unadjusted Purchase Index of mortgage applications decreased 2 percent compared with the previous week and was 12 percent lower than the same week one year ago.

Joel Kan, MBA's associate vice president of economic and industry forecasting, said that Treasury yields increased due to growing optimism about the strengthening economy following last week's Federal Open Market Committee meeting.

"Mortgage rates in response rose across all loan types, with the benchmark 30-year fixed rate reaching its highest level since early July 2021," he said.

"The increase in rates—mostly later in the week—led to a decrease in both purchase and refinance applications, with a prominent decline in government loan applications. Conventional loan applications increased, driven by a rise in conventional refinances. This was perhaps a sign that some borrowers reacted to higher rates and decided to refinance."

Kan added that with home-price appreciation increasing more than 19 percent year on year in July, applications for larger loan amounts continue to reign over lower-balance loans.

"The average loan size for a purchase application reached $410,000, its highest level since May 2021," he said.

MBA's survey data—which cover over 75 percent of all U.S. retail residential mortgage applications—comes after the Federal Reserve last week said it will likely begin reducing its monthly purchases of U.S. Treasury bonds and mortgage-backed securities sooner than expected, pending growth in the labor market.

Fed Chair Jerome Powell said in a news conference that the central bank said it could begin pulling back on its $120 billion in monthly purchases as early as November, which will likely lead to increased mortgage rates.

However, the Fed noted that it will also keep its interest rates near zero as "risks to the economic outlook remain."

Reuters contributed to this report.

By Katabella Roberts

Katabella Roberts is a reporter currently based in Turkey. She covers news and business for The Epoch Times, focusing primarily on the United States.

The Epoch Times, founded in 2000, is headquartered in Manhattan, New York, with a mission to provide independent and accurate information free of political bias or corporate influence. The organization was established in response to censorship within China and a lack of global awareness regarding the Chinese regime's repression of the spiritual practice Falun Gong.

The Epoch Times is a widely read newspaper that is distributed in 33 countries and is available in 21 languages. The publication has been critical in providing balanced and detailed reporting on major global events such as the 2003 SARS pandemic and the 2008 financial crisis. Notably, the organization has played a key role in exposing corruption inside China.

Aside from its human rights coverage, The Epoch Times has made significant contributions in a variety of fields. It has received praise for its in-depth analysis and expert perspectives on business, the economy and U.S. politics. The newspaper has also received praise for its broad coverage of these topics.

A series of editorials titled "Nine Commentaries on the Communist Party" appeared in The Epoch Times in 2004. It asserts that freedom and prosperity in China can only be achieved by eliminating the Communist Party, which violated China's cultural and spiritual values. In addition, the organization led the Tuidang movement, which resulted in over 400 million Chinese citizens quitting the Communist Party. In spite of this, 90% of websites referring to the "Nine Commentaries" were blocked by the Chinese regime.

The Epoch Times has been at the forefront of investigating high-level corruption cases within the Chinese regime, with its reporters taking significant risks to uncover these stories. The organization has received several awards for its investigative journalism.

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