Mortgage rates increased for the week ending April 22, thereby bringing an end to weeks of mortgage rate declines. This shift has convinced many rate-sensitive buyers to put off their home purchase plans for the meantime.
Freddie Mac reported that the average 30-year fixed mortgage rose from 6.27% the previous week to 6.39%. While the mortgage rate had fallen by almost half a percentage point since early March, the trajectory of the mortgage rate changed once several Federal Reserve officials hinted that further interest rates may be implemented going forward as a means of further fighting inflation.
“We had a surge of buyers probably a month and a half ago, but that’s waned,” Sean Dycus, a realtor at Mainstreet Properties said of the effect of the mortgage rate increase. “Buyers are still out there, but we’re going to have less listings coming on. That’s the big prediction: Homeowners are going to hold back from listing this year because of rates.”
A survey by the Mortgage Bankers Association found that the number of property purchase applications declined by 10% from the week ending April 14. Furthermore, demand was 36% lower than the same week a year earlier.