U.S. mortgage borrowing costs climbed Tuesday as the average 30-year fixed rate reached 7.30%, while purchase and refinancing applications remained below year-earlier levels despite weekly gains.
Mortgage News Daily’s tracker showed the rate 12 basis points above Monday, its largest daily rise in more than a month. The daily increase followed four consecutive weekly declines in the Mortgage Bankers Association’s (MBA) rate measure.
The MBA put its weekly average for a 30-year fixed mortgage with a 20% down payment at 7.21%, down from 7.30% in the preceding week. It was the measure’s lowest reading since mid-September.
An MBA index adjusted for seasonal patterns recorded a 6.2% weekly gain. Purchase loan applications rose 8% from the prior week but were 18% below the comparable week a year earlier. Refinance applications increased 5% weekly and remained 57% lower than a year earlier.
CNBC reported that Joel Kan, the MBA’s vice president and deputy chief economist, linked support for first-time buyers to the Federal Housing Administration (FHA) rate. It was below 7% and more than 20 basis points under the rate for conforming loans, Kan said.
CNBC also reported that adjustable-rate mortgages made up a slightly smaller share of applications as rates eased during the survey period. These loans can offer lower rates while exposing borrowers to greater risk, and their share tends to rise when rates increase, the outlet said.
