At Notary Near You we consider Mortgage News Daily a reliable source of news about current mortgage rates and trends.
In a recent article titled Mortgage Rates Holding Near 2 Month Lows they state “The average conventional 30yr fixed rate is easily back into the mid 6% range.”Matthew Graham, author of the article, takes a fun approach to this serious topic.
It is no surprise that mortgage application rates have dramatically decreased, reacting to mortgage interest rates that have reached a 20 year high. According to an article MortgageNewsDaily.com refinance mortgage applications are “86 percent lower than the same week in 2021”. Jann Swanson provides related statistics in her article:
Home purchase mortgage applications were 19% lower than the same week in July last year, and 6% lower than the prior week. Those numbers are a direct reflection of the impact inflation is having on our economy.
Volatility is a word commonly used this year to describe the mortgage rate pace over the past year. In an article titled Mortgage Rates Hit 6%. World is Not Ending. May Just Be Beginning, written by Matthew Graham for Mortgage News Daily, he provides notable details and graphs that provide insights into what has prompted this volatility.
In a recent article submitted by Diana Olick on CNBC, she reports that weekly mortgage demand from homebuyers tumbled 12%, as higher interest rates take their toll. She makes these key points:
If you have kept an eye on mortgage interest rates as they climb to the highest point in years, it’s no surprise to read this article on MortgageNewsDaily state “The Mortgage Bankers Association’s (MBA) latest weekly mortgage application data shows an ongoing and unsurprising decline in refinance applications.” In light of increased prices and rising rates it is interesting to note that purchase application volume is only seeing a slight decline.
This spike is a result of rising inflation and Federal Reserve rate hikes. The consumer price index (CPI) rose to 8.5% which is the highest level since 1981. The Federal Reserve starting rate hikes in March was the first increase since 2018. It is expected that the Federal Reserve will continue with rate hikes due to current aggressive inflation.
According to an article written by Matthew Graham for Mortgage News Daily “Adults who are old enough to remember 1994 have always had an ace in the hole when it comes to today’s young whipper snappers complaining about abrupt spikes in mortgage rates. Sure, even older adults have the first few months of 1980, but 1994 was a more compelling example because it wasn’t part of the once-in-a-lifetime inflationary spike. As such, it is a more worthy comparison to any modern example of rate volatility. As of today, the race between the first few months of 1994 and 2022 are neck and neck in terms of damage done to mortgage rates in a short amount of time.”
Mortgage interest rates have begun to rise, and as a result January saw the first decrease in mortgage refinance volume since November 2020. The long running record of historically low rates may be news of the past after several weeks of rising rates.
Home sales were strong throughout 2020, with purchase applications up 42% in December 2020 compared to same period in 2019. These results are much better than many projected in early 2020, when the Covid Pandemic brought our nation to a standstill for months. The historically low mortgage interest rates in 2020 is the clear reason for the stellar home sales market performance.