{"id":672,"date":"2023-10-13T15:04:26","date_gmt":"2023-10-13T15:04:26","guid":{"rendered":"https:\/\/connectwithfund.com\/finance\/adjustable-rate-mortgage-demand-increases-to-highest-level-since-november-2022-as-high-u-s-rates-hammer-home-buyers\/"},"modified":"2023-10-13T15:04:27","modified_gmt":"2023-10-13T15:04:27","slug":"adjustable-rate-mortgage-demand-increases-to-highest-level-since-november-2022-as-high-u-s-rates-hammer-home-buyers","status":"publish","type":"post","link":"https:\/\/connectwithfund.com\/?p=672","title":{"rendered":"Adjustable-rate mortgage demand increases to highest level since November 2022 as high U.S. rates hammer home buyers\u00a0"},"content":{"rendered":"
\n

The numbers: <\/strong>Home buyers are turning to adjustable-rate mortgages, or ARMs, as persistently high rates hurt their ability to buy houses.<\/p>\n

With the 30-year U.S. mortgage rate rising to the highest levels since 2000, a dip in the rates on ARMs prompted some buyers to act, pushing up ARM applications by 15% from the previous week.\u00a0<\/p>\n

\n

That pushed up the overall market composite index \u2014 a measure of mortgage application volume \u2014 the Mortgage Bankers Association (MBA) said on Wednesday.\u00a0<\/p>\n

The market index rose 0.6% to 179.3 for the week ending Oct. 6 from a week earlier. A year ago, the index stood at 214.3.<\/p>\n

Key details:<\/strong> To be clear, home buying and refinancing demand continues to be low, as few homeowners and buyers see the current environment as ideal.<\/p>\n

But a drop in ARM rates boosted demand slightly. The purchase index \u2014 which measures mortgage applications for the purchase of a home \u2014 rose 0.7% from last week.\u00a0<\/p>\n

Refinancing also rose, despite higher rates. Buyers could be dipping into their home equity through cash-out refinancing. The refinance index rose 0.3%.<\/p>\n

The average contract rate for the 30-year mortgage for homes sold for $726,200 or less was 7.67% for the week ending October 6. That\u2019s up from 7.53% the week before, the MBA said.\u00a0<\/p>\n

The rate for jumbo loans, or the 30-year mortgage for homes sold for over $726,200, was 7.7%, up from 7.51% the previous week.\u00a0<\/p>\n

The average rate for a 30-year mortgage backed by the Federal Housing Administration rose to 7.4% from 7.29%.\u00a0<\/p>\n

The 15-year rose to 6.97% from 6.86% from the previous week.\u00a0<\/p>\n

The rate for adjustable-rate mortgages fell to 6.33% from last week\u2019s 6.49%. The share of ARM applications rose by 15% from the previous week. ARMs now comprise 9.2% of all applications, which is the highest share in 10 months.<\/p>\n

The big picture: <\/strong>The U.S. housing market continues to be held hostage by high mortgage rates. High rates discourage home buyers, as well as homeowners who are considering selling.<\/p>\n

ARMs offer one way for buyers to find a lower rate on their loan temporarily for the initial period, until it resets to the prevailing rate. With rates at multi-decade highs, home buyers taking on ARMs are betting on the likelihood of them falling by the time their ARM resets.<\/p>\n

What the MBA said<\/strong>: \u201dApplication activity remains depressed and close to multi-decade lows, with purchase applications still almost 20% behind last year\u2019s pace,\u201d Joel Kan, deputy chief economist and vice president at the MBA, said in a statement.\u00a0<\/p>\n

\u201cRefinance applications also continue to be limited, and the average loan size has fallen to its lowest level since 2017,\u201d he added.<\/p>\n

Market reaction<\/strong>: The yield on the 10-year Treasury note
\n BX:TMUBMUSD10Y
\n was below 4.7% in early morning trading Wednesday.<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The numbers: Home buyers are turning to adjustable-rate mortgages, or ARMs, as persistently high rates hurt their ability to buy houses. With the 30-year U.S. mortgage rate rising to the highest levels since 2000, a dip in the rates on ARMs prompted some buyers to act, pushing up ARM applications by 15% from the previous week.\u00a0 That pushed up the overall market composite index \u2014 a measure of mortgage application volume \u2014 the Mortgage Bankers Association (MBA) said on Wednesday.\u00a0 The market index rose 0.6% to 179.3 for the week ending Oct. 6 from a week earlier. A year ago,<\/p>\n","protected":false},"author":1,"featured_media":673,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[37],"tags":[],"class_list":["post-672","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance"],"yoast_head":"\nAdjustable-rate mortgage demand increases to highest level since November 2022 as high U.S. rates hammer home buyers\u00a0 | ConnectWithFund<\/title>\n<meta name=\"description\" content=\"The numbers: Home buyers are turning to adjustable-rate mortgages, or ARMs, as persistently high rates hurt their ability to buy houses. 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