30-year mortgage rate rises to 6.81%

The Mortgage Bankers Association said on Wednesday that the average contract rate on a 30-year fixed mortgage rose to 6.81% in the week ended July 31, up from 6.76% a week earlier and the highest in more than a year. The increase hit a housing market that was already losing momentum, with total mortgage application volume falling 2.9% from the prior week. Refinance applications dropped 2% from the week before and were 9% lower than a year earlier, while purchase applications fell 4% on the week and were running below year-ago levels, according to the MBA survey. ### Why does one weekly mortgage rate print matter so much? The MBA survey is one of the market’s standard weekly snapshots of borrowing costs and loan demand, covering applications for home purchases and refinancings. Its 30-year fixed rate measure refers to conforming loans of $832,750 or less, with points decreasing to 0.65 from 0.69 for borrowers making a 20% down payment, CNBC reported, citing the trade group’s data. (newslink.mba.org) A move from 6.76% to 6.81% may look small, but mortgage demand data showed borrowers reacting quickly. MBA Chief Economist Mike Fratantoni said in comments reported by CNBC and other housing outlets that higher long-term rates after the July Federal Open Market Committee meeting weakened demand for both purchase and refinance loans. (cnbc.com) ### What does the drop in applications say about buyers and refinancers? Refinancing tends to be the most rate-sensitive part of the mortgage market, and that showed again last week. The MBA data showed refinance applications fell 2% from the previous week and were 9% below the same week a year earlier. (cnbc.com) Purchase activity also weakened. The seasonally adjusted purchase index fell 4% week over week, and several reports on the survey said purchase volume was below or roughly below the same period last year, marking a softer stretch for demand during what is usually a key part of the homebuying season. ### Why are daily mortgage trackers showing lower numbers? (newslink.mba.org) Zillow and other consumer-facing trackers measure rates differently from the MBA’s weekly survey, which is based on loan application data and can lag day-to-day market moves. Zillow said its 30-year fixed mortgage rate was 6.75% on Aug. 5, while U.S. News reported an average 30-year fixed purchase mortgage rate of 6.834% the same day. (cnbc.com) CNBC’s report also cited daily market data showing some easing after the weekly MBA reading. That gap is common when Treasury yields and lender pricing move between survey periods, leaving borrowers with one set of backward-looking weekly numbers and another set of live quotes. ### What should borrowers watch next? August rate sheets from lenders and next week’s MBA application survey will show whether the rise to 6.81% was the start of a broader move or a short-lived spike. (zillow.com) Daily trackers from Zillow, NerdWallet and other mortgage sites were already showing mixed or slightly lower readings on Aug. 5. The next concrete marker is the MBA’s next weekly applications release, which will update both the 30-year fixed average and the purchase and refinance indexes. (cnbc.com) For borrowers, that report will offer the clearest near-term read on whether demand continues to soften as summer moves into late August. (newslink.mba.org) (zillow.com)