US Home Refinancing Plunges to Three-Year Low as Rates Jump

Source: MBA

A measure of applications to refinance a US home edged down last week to a three-year low, and filings to buy property fell by the most since mid-February as mortgages rate continued to surge. DXY down-0.02%, EURUSD up +0.09%

• The Mortgage Bankers Association’s refinancing index plummeted 9.9% in the week ended April to 1,166.3. The group’s measure of purchases plunged by 3.4%.
• The MBA stated that the average contract rate on a 30-year fixed mortgage increased by ten basis points to 4.9% and rose 1.07 percentage points in the last eight weeks.
• The effective rate, which includes compounding effects, jumped to 5.06%. Both rates have been at the highest level since late 2018.
• Joel Kan, associate vice president of economic and industry forecasting, MBA, stated that mortgage application volume continues to fall due to rapidly increasing mortgage rates as financial markets expect tighter monetary policy in the coming months.
• Refinancing accounts for 38.8% of all mortgage application activity dropped from 60% a year ago and the smallest percentage since May 2019.