Mortgage application volume dropped 10.6% last week as the average rate for a 30-year fixed-rate mortgage increased to 7.06%, up from 6.87% the previous week, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
For the week ended February 16, applications for refinances fell 11% but were up 0.1% compared with the same week one year ago.
Applications for purchases dropped 10% compared with the previous week and were down 13% compared with the same week one year earlier.
“Mortgage rates moved back above 7 percent last week following news that inflation picked up in January, dimming hopes of a near term rate cut,” says Mike Fratantoni, senior vice president and chief economist for the MBA, in a statement. “Mortgage applications dropped as a result with a larger decline in refinance applications. Potential homebuyers are quite sensitive to these rate changes, as affordability is strained with both higher rates and higher home values in this supply-constrained market.”
The refinance share of mortgage activity decreased to 32.6% of total applications, down from 34.0% the previous week.
The adjustable-rate mortgage (ARM) share of activity increased to 7.4% of total applications.