- Applications to refinance a home loan increased 1% last week but were still 56% lower than the same week one year ago.
- Mortgage applications to purchase a home fell 2% for the week and were 9% lower year over year.
- While mortgage rates rose to the highest level in two years last week, they have since fallen quite sharply due to the war in Ukraine.
Mortgage demand stalled last week, as interest rates rose, but rates are now falling fast due to the Russian invasion of Ukraine.
Mortgage application volume was essentially flat compared with the previous week, borrowers had no incentive to refinance, and homebuyers continue to face high prices and a severe lack of listings.
Applications to refinance a home loan increased 1% for the week but were still 56% lower than the same week one year ago. Rates were 92 basis points lower a year ago, so there were far fewer borrowers who could benefit from a refinance. The refinance share of mortgage activity decreased to 49.9% of total applications from 50.1% the previous week.
Mortgage applications to purchase a home fell 2% for the week and were 9% lower year over year. Buyers are now seeing prices appreciate at the fastest pace in more than 45 years, up just over 19% from a year ago in January.
These dynamics will likely now shift, due to a drop in mortgage rates this week. The war in Ukraine has caused investors to rush into the bond market, which resulted in lower yields. Mortgage rates loosely follow the yield on the U.S. 10-year Treasury.
However, the Fed has not changed their plans to increase rates this year, so all this may be temporary. Time will tell.