Just as the housing market is supposed to be heating up, mortgage rates have begun rising again, pushing buyers back out of the market.

According to the Mortgage Bankers Association’s seasonally adjusted index, Applications for mortgages to purchase a home fell 6% last week compared with the prior week. Year over year, volume dropped 44%, hitting a 28 year low.

Meanwhile, the average contract interest rate for 30-year fixed rate mortgages with conforming loan balances ($726,200 or less) rose from 6.62% to 6.71%, with points rising from .75 to 0.77 (including origination fee) for loans with a 20% down payment. That is the highest rate in three months.

In just the past month, mortgage rates have risen 50 basis points. One year ago, rates were roughly in the 4% range.

Joel Kan, an MBA economist said, “Data on inflation, employment, and economic activity have signaled that inflation may not be cooling as quickly as anticipated, which continues to put upward pressure on rates.”

Home loan refinancing applications decreased 6% over the week, and fell 74% year over year.

Kan added, “Refinance applications account for less than a third of all applications and remained more than 70% behind last year’s pace, as a majority of homeowners are already locked into lower rates.”

Although mortgage rates have been relatively stable over the last week, the trajectory now appears to be rising, after briefly falling in January. The briefly lower rates sparked a surge in homebuying. However judging by the demand for mortgages of late, it would appear the spring will see a very sluggish market.

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