Why Recessions Forge Great CEOs Who Think Beyond Cost-Cutting
04/15/2025
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But the CEOs who make history in downturns aren’t the ones with the deepest cuts
September 30, 2021: -Higher interest rates took some latest wind out of the sails in the mortgage market.
According to the Mortgage Bankers Association’s seasonally adjusted index after gains, total mortgage application volume decreased 1.1% last week from the previous week.
The contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of nearly $548,250 increased to 3.10% from 3.03%. Points, including the origination fee, increased to 0.34 from 0.30 for loans with a down payment of 20%.
“Increased optimism about the strength of the economy pushed Treasury yields higher following previous week’s FOMC meeting. Mortgage rates in response rose across all loan types, with the benchmark 30-year fixed-rate hitting its highest level since July 2021,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting.
Applications to refinance a home loan are very sensitive to weekly rate movements, decreasing 1% from last week and were essentially flat from almost a year ago. The surge in interest rates occurred late in the week and continued into this week, which suggests the negative effect on refinancing demand will be more severe in the coming week’s report.
Mortgage applications to purchase a home decreased 1% last week and were 12% lower than before a year. The weakness in purchase demand is minor about rising interest rates, which are still historically low, and about sky-high home prices.
Prices nationally surged 19.7% year over year in July, up from an 18.7% annual increase in June, according to the latest S&P CoreLogic Case-Shiller Home Price Index. That’s another record increase.
“With home-price appreciation continuing to run hot, which increases over 19 percent in July, applications for larger loan amounts continue to outpace lower-balance loans. The loan size for a purchase application is $410,000, its highest level since May 2021,” Kan said.
Price gains are expected to start soon cooling slightly, simply because sales have dropped and more supply is coming on the market. Higher mortgage rates will also take some fuel out of rising prices since potential buyers would face higher monthly payments.
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