The 30-year fixed mortgage rate reached its highest point since 2000 last week, but adjustable-rate mortgages (ARMs) experienced a decrease in rates, leading to an uptick in ARM applications. The Mortgage Bankers Association reported a 0.6% increase in total mortgage application volume, driven by a 15% surge in ARM applications that pushed the total ARM share to 9.2%, the highest since November 2022, according to CNBC.
Application activity for home purchases rose by 1%, while refinance applications inched up 0.3%, but these numbers remain significantly lower compared with the previous year.
The average loan size is now at its lowest level since 2017. This indicates that most of the sales activity is happening at the lower end of the market. At the very high end, buyers tend to use all cash, and in the middle range affordability has been hit so hard that the market is essentially frozen.
At an open house in Washington, D.C., on Sunday, there were plenty of potential buyers looking, but most said that was all they were doing: just looking. The house was priced at $1.54 million.
“In this first two weeks of October, as anticipated, inventories have taken a jump, but then because interest rates have taken a jump too, we’re seeing less buyers. Lots of traffic, but not a lot of actual shoppers,” said Lisa Resch, a real estate agent with Compass who listed the home.
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