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Demand for riskier mortgages rises along with interest rates
CNBC • • business
Key Points:
- Mortgage rates increased to their highest level in four weeks, with the average 30-year fixed-rate mortgage rising slightly to 6.79%, causing home loan demand to remain stagnant.
- Total mortgage application volume rose marginally by 0.8% last week, with purchase applications up 2% but still slightly below the previous year's level.
- More borrowers are opting for adjustable-rate mortgages (ARMs), which offer lower initial rates but carry future rate adjustment risks; ARM applications reached 8% of total mortgage applications, the highest in five weeks.
- Refinancing applications declined by 1% last week and are 19% lower than a year ago, as high rates reduce incentives for homeowners to refinance.
- Rising inflation concerns and growing deficits globally are pushing yields and mortgage rates higher, impacting borrowing costs and housing market dynamics.
