WASHINGTON–Renewed worries over President Trump’s tariffs and the broader economy itself helped to drive Treasury yields higher last week and, along with them, mortgage rates.
Not surprisingly, as a result total mortgage application volume declined 10% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
One week earlier a slight decline in mortgage rates had led to a semi-spike in applications.
The Rate Increase
According to the MBA, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $806,500 or less, increased to 6.82% from 6.77%, with points remaining unchanged at 0.62, including the origination fee, for loans with a 20% down payment.
“Treasury yields finished higher last week on average despite an intra-week drop, driven partly by renewed concerns of the impact of tariffs on the economy,” Joel Kan, vice president and deputy chief economist at the MBA, said in a statement. “As a result, mortgage rates rose after two weeks of declines, which contributed to slower application activity.”
Additional Findings
The MBA data further reveal:
- Applications for a mortgage to purchase a home fell 12% for the week and were 13% higher than the same week one year ago. That was the slowest pace since May.
- Jumbo rates were lower than conventional rates for the third straight week, as some depositories may be positioning themselves for growth in balance sheet lending, according to Kan.
- Applications to refinance a home loan dropped 7% for the week and were 25% higher than the same week one year ago.
Refi’s Also Dip
“Refinance applications also dipped because of higher rates, with refinance applications falling, led by VA refinances partially reversing their previous week’s gain, dropping 22%,” Kan said in a statement.
