Mortgage Rates Surge Higher Again

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) increased to 6.87% last week, up from 6.80% the week before. According to CNBC, that is the highest rate since early December 2023. Here are other important points to note:
  • Applications for a mortgage to purchase a home dropped 3% for the week and were down 12% from the same week a year ago.
  • Applications to refinance a home loan fell 2% for the week but were 12% higher than the same week one year ago.

Our take
The rise in mortgage rates isn’t a surprise given the latest inflation and employment numbers we saw this week. This confirms that the Fed is unlikely to cut interest rates in March. As a result, mortgage rates will likely hover in the high-6% range until more definitive progress has been made towards a 2% CPI. Nonetheless, this spring, buyers are still likely to see lower mortgage rates than in the fall of 2023. This will mean more eager buyers in the market. While mortgage rates will fluctuate, we still believe they are on a downward trajectory for this year.

 

James and David, The Blueprint

February 16, 2024