What is the impact of mortgage rates on home sales?
The total number of mortgage applications fell 6.9% for the week ending Oct. 1, according to the Mortgage Bankers Association. The largest decline occurred in the refinancing loan category, which declined to double digits week over week.
- Purchase requests are down 2% from the previous week and 13% from the same week last year.
- The number of loan refinancing requests decreased 10% from the previous week and 16% year-on-year. Despite the decline, refinancing still constitutes the bulk of mortgage lending activity, representing nearly 65% of all lending activity.
“The higher rates reduce the incentive for borrowers to refinance, as declines have been observed for all types of loans,” said Joel Kan, associate vice president of economic and industrial forecasting at MBA. “Purchasing activity also declined, driven by a drop in requests for conventional loans.”
Guide to current mortgage rates
What is a good interest rate on a home loan?
Mortgage rates today are near their historic lows. Freddie Mac’s Average Rates show what a borrower with a 20% down payment and a good credit score could get if they spoke to a lender this week. If you make a smaller down payment, have a lower credit score, or take out a non-compliant (or jumbo) mortgage, you may see a higher rate. A good mortgage rate is one where you can comfortably pay the monthly payments and where other loan details (such as the loan term, whether the rate is fixed or adjustable, and other fees) match your needs.