Mortgage rates increased again the week of February 5th, 2018, and mortgage application volume dropped 6.6 percent from the previous week.
Home refinance loan applications also fell, 7 percent, with the recent interest rate hike. The share of refinances in all mortgage activity dropped to its lowest level since July 2017, 44.4 percent of total applications. As affordability tightens with rising rates, borrowers may begin seeking home equity lines of credit (HELOC), rather than refinancing mortgages. Indeed, HELOC volume has been rising at a sustained rate, per CNBC's reporting.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased to its highest level since January 2014 ... "The drumbeat continues. Inflation is increasing, as are deficits, and the economy and job market continue to look strong, and rates are higher as a result," said Mike Fratantoni, chief economist for the MBA. "This upward move in rates is coming right at the start of the spring buying season and is a headwind."
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