Mortgage interest rates increased 0.45% in July compared to June, according to the Federal Housing Finance Agency (FHFA).
The average interest rate on loans closed for previously occupied homes was 4.01% in late June.
The contract rate on the composite of all mortgage loans was 4%, up 45 basis points from 3.55% in June.
The FHFA notes that interest rates are typically locked-in 30 to 45 days before a loan is closed. Consequently, July data reflect market rates from mid-to-late June.
The effective interest rate, which includes fees and charges over the life of the mortgage, was 4.12%, up 45 basis points from 3.67% in June.
The average interest rate on conventional, 30-year, fixed-rate mortgages of $417,000 or less was 4.27% in July, an increase of 51 basis points. The average loan amount for all loans was $278,200 in July, down $4,200 from $282,400 in June.
Recent data from the Mortgage Bankers Association (MBA) shows that rising interest rates are having an impact on mortgage application volume, which has been decreasing steadily since July.
Application volume dipped 2.5% for the week ending August 23, on an adjusted basis, compared to the week prior, according to the MBA's Weekly Mortgage Applications Survey. On an unadjusted basis, volume was down 3%.
What's more, refinancing volume has decreased dramatically, which is to be expected when rates rise. Refinancing volume was down 5%, compared to the week prior, and is down 64.2%, compared to the week ending May 3, according to the MBA.
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