Mortgage Rates Hit Three-Week High Before Recent Dip

Mortgage interest rates reached a three-week high last week, causing a 1% drop in total mortgage application volume. The Mortgage Bankers Association reported that the average contract interest rate for 30-year fixed-rate mortgages rose to 6.78%.

This rate increase led to a 2% decline in refinance applications and a 0.3% decrease in home purchase applications. Specifically, FHA applications saw a 7% drop. Despite these trends, Realtor.com noted that fewer buyers are utilizing all-cash offers as reduced market competition makes sellers more receptive to financed buyers.

Rates have begun to decline this week. Mortgage News Daily attributes this shift to falling oil prices and bond yields, which reacted to reports of progress in a peace process involving Pakistani mediators.