| 
Demand for purchase mortgages appears to be holding steady even as interest rates rapidly rose to nearly 4.5 percent over the last month.
The Mortgage Bankers Association’s last five weekly mortgage application survey reports, covering Feb. 19 through March 25, show large numbers of new purchase loan applications rising or falling by 1 percent to 1.5 percent each week.
The one exception, the week between Feb. 25 and March 4, saw numbers of purchase loan applications rise 10.5 percent. That jump coincided with a small drop in rates from 3.89 percent to 3.76 percent, according to Freddie Mac.
“Even with the ongoing climb in rates, purchase application volumes were little changed last week. This is particularly auspicious, as we are now in the beginning of the spring homebuying season, and those shopping for homes are struggling with not only higher and more volatile mortgage rates, but also an ongoing shortage of homes on the market,” MBA chief economist Mike Fratantoni said in a statement. “Given these hurdles, it appears to be promising news that purchase application volume has not declined, as many potential buyers are likely feeling the squeeze in their purchasing power from the jump in rates.”
Still, numbers of purchase applications are off from last year, with the last five MBA mortgage application survey reports showing year-over-year declines between 7.4 percent and 12 percent from each week’s opposite number in 2021.
Part of the decline is likely down to declining home affordability as record-low inventory levels nation-wide help push home prices ever higher and increase buyers’ monthly mortgage payments, particularly when combined with rising mortgage rates. A separate MBA analysis published on March 24 showed the national median payment applied for by applicants jumping 8.3 percent to $1,653 in February, up from $1,526 in January. As of March 24, the average rate on a 30-year, fixed-rate home mortgage sat at 4.42 percent, Freddie Mac reported.
