Mortgage Purchase Applications SOAR 18% WoW As Homebuyers Rush To Lock In Mortgage Rate Before The Fed Goes Crazy (Mortgage Rates Rise Above 6%)

Confounded Interest ^ | 06/15/2022 | Anthony B. Sanders

[Browns Ultra Fan]

The Federal Reserve is driving me crazy! US 30-year mortgage rates have hit the 6% level (and is higher with some major lenders).

But the fear of The Fed raising rates even more is causing a rush to lock-in rates.

Mortgage applications increased 6.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 10, 2022. Last week’s results are compared to the prior week, which included an adjustment for the Memorial Day holiday.

The seasonally adjusted Purchase Index increased 8 percent from one week earlier. The unadjusted Purchase Index increased 18 percent compared with the previous week and was 16 percent lower than the same week one year ago.

The Refinance Index increased 4 percent from the previous week and was 76 percent lower than the same week one year ago.

Is The Fed raising rates so fast a Good Thing? Not for mortgage lenders!

Let’s see what happens today with The Fed. But for right now, we have PANIC IN (FED) NEEDLE PARK!!

[Browns Ultra Fan]

The Fed leaked today's rate hikes to banks yesterday. So it won't be 75 bps.

[Dilbert San Diego]

Interest rates are rising. We will see if this continues and puts a dent in the housing market.

I’m sure many here remember Carter era interest rates on mortgages well into the double digits. Thankfully we aren’t anywhere near that yet.

[P.O.E.]

My first mortgage in 1985 was around 12%.

[thegagline]

So it won't be 75 bps.

I’m betting on 75 bps.

[The Unknown Republican]

There never really is such thing as a rate lock. The banks can change all of the other qualification rules at any time to make it impossible for people to actually use that locked rate. They can change debt to income ratio requirements or otherwise change the cap on how much they will lend. I know of several banks that banks that did just last Wednesday..the economy has them freaked out.

[Little Ray]

The Fed is crazy NOT to have raised rates before this.

[californian by choice]

my first mortgage was 14% in 1983

[iontheball]

Jimmy Carter days all over again.

[PMAS]

Larry Fink of Blackrock is licking his lips for the day he becomes the only buyer of single family homes

[KarlInOhio]

Before The Fed Goes Crazy

The Fed has been keeping interest rates artificially low ever since the dot com crash of 2000 to juice the stock market and banks. The Fed is finally going sane but way to late.

[dsrtsage]

“Jimmy Carter days all over again.”

Unfair comparison. This stuff happened during Jimmy’s time due to incompetence, not malice

[TomGuy]

US 30-year mortgage rates have hit the 6% level .

Sounds ominous, except that a 5%-6% interest/mortgage rate was historically considered 'the norm' going into the Carter years and 8%-10% was 'the norm' until the GWB real estate crisis that shrank interest/mortgage rates to historically low levels.

1920-34 near 6% mortgage average¹
1935-45 just under 4.5% mortgage average¹
1960 - 5.1% mortgage average²
1971 - 7.3% mortgage average¹
1980 - 13.7% mortgage average²
1981 - 16.6% to 18.45% mortgage average²
1990 - 10.1% mortgage average²
2000 - 8.1% mortgage average²
2010 - 4.7% mortgage average²
2020 - 3.1% mortgage average²

sources:

¹Mortgage Rate History: Check Out These Charts from the Early 1900s

²Here's how much home prices have risen since 1950

[Rusty0604]

For sure.

[Rusty0604]

My daughter has been in the market to buy a house. I told her people her age don’t realize mortgage rates weren’t always so low. I advised her to wait for prices go down. She said her realtor told her the same thing.

[PUGACHEV]

My niece and her husband, both in their early thirties, have two good jobs in the Washington D.C. area, and they cannot buy a house except in the far suburbs beyond Manassas. When they find a place they like, they are always outbid by cash buyers. This may explain why the close-in areas around D.C are smothered by upscale rental units, with more being put up all the time.

Clearly, the prospect of home ownership has diminished. My father bought a home on 1/4 acre near NIH in the '50s with three children, an ordinary salary, and a wife who never worked. I bought my first home in 1981 in Arlington with an interest rate of 17% and, while both my wife and I worked at the time, it wasn't that difficult. Today, none of that is possible.

[Rusty0604]

That’s happening in many places, even in the small town on Wisconsin my daughter lives in. They’ve been outbid every time.

I live in a rural town in Texas and the houses have even gone up considerably here.

It will go down in most places. For everyone’s sake I hope it is orderly and not like the bust of 2008.

[Robe]

We moved into a new build last Feb...with a VA 0 down at 2.25%..I think we dodged a bullet.

[Rural_Michigan]

I live in MD. They have to go out towards Baltimore. Some places are still in the 300s.