by Karen Faulkner, Worthy News Correspondent
(Worthy News) – US mortgage rates increased for the 10th consecutive week as of the week ending October 21, reaching the highest level they have been for over 20 years, the Mortgage Bankers Association (MBA) reports. Mortgage applications for the week ending October 21 also decreased by 1.7 percent from a week earlier.
“Mortgage rates increased for the 10th consecutive week, with the 30-year fixed rate reaching 7.16 percent, the highest rate since 2001, Joel Kan, MBA’s Vice President and Deputy Chief Economist, said in a statement. “The ongoing trend of rising mortgage rates continues to depress mortgage application activity, which remained at its slowest pace since 1997.”
The refinance share of mortgage activity increased to 28.8 percent of total applications from 28.3 percent the previous week, but remained 86% percent lower year-over-year, MBA said. The unadjusted Purchase Index decreased by 3 percent from a week earlier, and was 42 percent lower than the same week one year ago.
“Refinance applications were essentially unchanged, but purchase applications declined 2 percent to the slowest pace since 2015 – over 40 percent behind last year’s pace,” Kan added. “Despite higher rates and lower overall application activity, there was a slight increase in FHA purchase applications, as FHA rates remained lower than conventional loan rates.”
According to an MBA forecast, economic and housing market weaknesses in 2023 will lead to a 3 percent decrease in purchase originations, reflecting a sluggish mortgage market.