The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $647,200 or less dropped from 4.15% to 4.09% for loans with a 20% down payment following Russia’s invasion of Ukraine, causing a subsequent 9% jump in refinance demand last week, CNBC reports. The slight drop in mortgage rates marked the first decrease in 12 weeks, and borrowers were quick to act.
Mortgage rates surged yet again at the start of this week, however, jumping more than 25 basis points in just 2 days. According to leading markets economists, more gains could mean higher inflation, greater volatility, and a potential drop in demand ahead.
Investors are moving away from bonds, causing yields to rise, despite the ongoing crisis in Ukraine, which caused rates to drop at the outset.
“While the Ukraine situation does indeed drive demand for bonds, the associated inflation implications are simultaneously pushing demand away,” wrote Matthew Graham, chief operating officer at Mortgage News Daily. “The net effect was a move back up to the highest mortgage rates since early 2019.”
Advertisement
Related Stories
Housing Markets
Metros Where Housing Prices Have Doubled in Less Than 10 Years
Historical data show it's taken less than 10 years for home prices to double in 68 of the country’s 100 largest cities
Housing Policy + Finance
Even With Inflation Running Hot and Elevated Mortgage Rates, Buyer Demand Rises
Mortgage rates will likely stay high for the next few months, but that doesn't seem to be deterring homebuyers
Financing
Q1 2024 Foreclosure Activity Rises Slightly
Data show New York, Houston, and Chicago topping the list of major metros with the greatest number of foreclosure starts during Q1 2024
