While mortgage demand fell last week and mortgage rates increased, the average homebuyer loan hit a new high amid rising home prices. CNBC says home prices are rising at the fastest rate in more than six years and the new average loan amount reached $395,200 last week. Total mortgage application volume dropped 4.1% last week from the previous week, but remains 16% higher compared to one year ago. Although homebuyers are not deterred much by small mortgage rate changes, according to CNBC, rates increased to 2.95% from 2.92% for 20-year fixed-rate mortgages.
After setting more than a dozen record lows last year, mortgage rates began to edge slightly higher to start this year. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) increased to 2.95% from 2.92% last week for loans with a 20% down payment.
The average rate for 30-year fixed loans with jumbo balances (greater than $510,400) decreased to 3.17% from 3.19%. Home sales are falling on the low end of the market, where supply is leanest and price gains widest, while sales are much stronger on the high end, where supply is more plentiful.
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