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“Additionally, ongoing uncertainty about the impact of the Fed’s reduction of its MBS and Treasury holdings is adding to the volatility in mortgage rates,” Kan continued. “The 30-year fixed rate was 6.52%, its highest level since mid-2008. After a brief pause in July, mortgage rates have increased more than a percentage point over the past six weeks.
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“With rates now more than double what they were a year ago, the pace of refinancing is running at a 22-year low, and last week was more than 80% below last year’s level. Similarly, purchase activity was 29% lower than a year ago, with higher rates and economic uncertainty weighing on buyers’ decisions.”
Of total applications, the portion of refinance activity decreased from 32.5% to 30.2% week over week. Meanwhile, the adjustable-rate mortgage (ARM) share of activity rose to 10.4% of total applications.
“The ARM share reached 10% of applications and almost 20% of dollar volume,” Kan said. “ARM loans remain a viable option for qualified borrowers in this rising rate environment.”
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