Mortgage Rates Jump to 2024 High, Cooling Refinance Demand | CNBC

Mortgage rates climbed to a five-month high last week, dampening the early-year momentum in refinance applications and contributing to a 10.9% decrease in overall mortgage application volume, according to data released Wednesday by the Mortgage Bankers Association (MBA).

The average contract interest rate for a 30-year fixed-rate mortgage with conforming loan balances ($832,750 or less) rose to 6.30% as of March 15, up from 6.19% the previous week. Points increased to 0.63 from 0.58, including the origination fee, for loans with a 20% down payment.

“Mortgage rates continued to move higher, driven by increasing Treasury yields as the conflict in the Middle East kept oil prices elevated, along with the risk of a broader inflationary shock,” said Joel Kan, an MBA economist, in a statement. “Mortgage rates increased across the board.”

The surge in rates significantly impacted refinance activity, with applications plummeting 19% week-over-week. Despite the decline, refinance applications remained 69% higher than the same week in 2023. Conventional refinance applications experienced a sharper drop of 27% over the week, while government refinances decreased by 5%, potentially due to a slower rate increase in FHA loans, Kan noted.

Purchase applications, however, managed a slight increase of 1%, and were 12% higher than the same week last year. This modest gain comes as the spring housing market prepares to officially launch at the end of this week, with inventory levels slightly higher than they were a year ago.

Affordability is showing tentative signs of improvement, with prices either declining or remaining flat in some markets compared to spring 2023. Mortgage News Daily reported that rates moved slightly lower at the start of this week.

While most analysts do not anticipate an interest rate cut from the Federal Reserve at its upcoming open market committee meeting, commentary from the chairman could still influence bond markets, according to Matthew Graham, chief operating officer at Mortgage News Daily. “Fed days can still cause volatility in rates, for better or worse,” Graham wrote. “In [Wednesday’s] case, any impact from the Fed should be smaller than it otherwise would have been due to the market’s preoccupation with geopolitical influences.”

The California MBA is hosting a networking event on April 15th at Tarantula Hill Brewing Company in Thousand Oaks, California, offering an opportunity for industry professionals to connect. The organization also has several conferences planned for later in the year, including the Mortgage Innovators Conference (May 6-7), the California MBA mPower Day (May 8), the Western Secondary Market Conference (August 10-12), the CAMPAC Golf Tournament (August 10), and the Western States CREF Conference (September 9-11).

The California Association of Mortgage Professionals (CAMP) offers a membership directory to connect loan officers and brokers in the state.