Mortgage rates

Following their largest drop in over a decade one week ago, averages rapidly swung upward as recession talk receded.

Although refinances picked up after the July 4th holiday, they failed to offset a larger decline in purchases.

Higher rates are also affecting the share of loans that actually go all the way to closing, Black Knight found.

The 30-year average has made a steep reversal over the past two weeks following a large acceleration in mid-June.

The 30-year average dropped for the first time in four weeks after surging more than 70 basis points earlier in the month.

For the 10th consecutive week, the brokerage’s Demand Index declined, this time by the largest share in over two years.

Recent remarks from Federal Reserve Chair Powell suggest more upward movement is ahead.

Some economists see a recession as inevitable but other markers, like the unemployment rate and consumption indicators, point to a resilient economy.

Many cities with higher shares of list price drops also appeared on a list of the most overvalued areas in the country.

If it works as intended, by calming inflation, it will help to keep mortgage rates low in the long-term.

The latest Federal Reserve move to combat inflation led to a weekly increase of more than 50 basis points.

Unlike two years ago, when the surge of refinance loans created a vast pool of free financing for the industry to use, today lenders must pay for it by the drink.

Rising interest rates eliminated any refinance incentive for 30% of the loans analyzed by Standard & Poor's, marking a turnaround from the start of the year when prepay speeds were expected to increase

While rate and term refinancings had the largest drop in volume, credit scores for cash-outs are 33 points lower than one year prior, indicating that these borrowers need financial liquidity, a Black Knight report found.

A positive employment report, robust consumer spending and Fed comments on inflation counter measures drove rates upward.

Lenders reduced refinance and jumbo programs on their product menus as interest rates continued to rise in May, the Mortgage Bankers Association said.

With half-point interest-rate increases all but certain in June and July, Federal Reserve officials are shifting the focus away from a destination on hikes to something that’s trickier to determine and explain: the broader impact of their policies on the economy.

The inventory shortage is beginning to ease, while demand is slowing due to high prices and rising mortgage rates.

With anticipated Federal Reserve moves already factored in, inflation and jobs data could play a bigger role in driving movement over the near term.

The 30-year average decreased for the second week in a row but still is almost 2% higher than its year-end 2021 level.