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Mortgage Rates Rise to 6% While Mortgage Applications Drop to 1999 Levels

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Housing Policy + Finance

Mortgage Rates Rise to 6% While Mortgage Applications Drop to 1999 Levels

Increased mortgage rates give new and experienced homebuyers pause

September 15, 2022
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Photo: Stock.adobe.com

According to MarketWatch, mortgage rates have reached 6%, twice what they were a year ago, and the highest they’ve been since November 2008. The increased rates are making homebuyers more hesitant to refinance or buy a home, as shown by mortgage application volume in the Market Composite Index. The Mortgage Bankers Association (MBA) reported that the index is now at its lowest level since December, 1999. Even though rates have risen, government loans from the Veterans Administration and the U.S. Department of Agriculture, which benefit first-time buyers, have been increasing week over week.

Key details: The Refinance Index dropped by 4.2% and was down 83% compared to a year ago. The Purchase Index—which measures mortgage applications for the purchase of a home—rose by 0.2% from the previous week. The average contract rate for the 30-year mortgage for homes sold for $647,200 or less was 6.01% for the week ending September 9. That’s up from 5.94%% the week before, the MBA said. For homes sold for over $647,200, the average rate for the 30-year was 5.56%. The 15-year rose to 5.3%. The rate for adjustable-rate mortgages, which comprise 9.1% of total applications, rose to 4.83%.

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