Mortgage Rates Drop Then Skyrocket! Is My Dream Home Doomed?!

A Swiftie's Guide to Mortgage Mayhem: 'All Too Well' Edition

Okay Swifties let's break down this financial rollercoaster because even I Taylor 'Mastermind' Swift had to Google 'basis points' like five times. Last week mortgage rates did a little 'Back to December' dip causing everyone to scream 'Long Live' to the housing market! Applications went up 20% the highest since September 2024. It was like the Eras Tour but for mortgages. Suddenly everyone wanted to 'Begin Again' with a new house!

30 Year Fixed Rates: From 'Teardrops on My Guitar' to 'Lover'?

The average 30 year fixed rate with conforming loan balances (that's $806,500 or less for those of us not counting our millions ahem) dropped to 6.61% from 6.70%. Okay it wasn't a *massive* drop but it was enough to make some homeowners think 'Maybe I *can* afford that lakeside cabin!' It was the lowest rate since October so it felt like going from 'Teardrops on My Guitar' to 'Lover' overnight. People thought they could finally 'Shake It Off' and get that dream home.

Refinance Mania: 'Look What You Made Me Do' (Get a Better Rate!)

Refinance applications skyrocketed 35% in a week and a whopping 93% from last year. It's like everyone collectively decided 'Look What You Made Me Do' (get a lower interest rate!). And who could blame them? It's all about that 'Blank Space' on your monthly budget am I right? Apparently the average refinance loan size was around $399,600. Living that high life I see you!

Buying a Home: 'Fearless' or Foolish?

Even with slightly lower rates buying a house is still a 'Fearless' endeavor. Purchase applications increased 9% weekly and 24% yearly reaching the highest level since January 2024. But let's be real prices are still high even with more listings. It's like trying to find a parking spot at the Met Gala – possible but stressful. Because of the high prices adjustable rate mortgages (ARMs) are becoming more popular. Apparently people are thinking “it’s me hi I’m the problem it’s me.”

Adjustable Rate Mortgages: 'The Best Day' or a 'Cruel Summer'?

Speaking of ARMs their share of total applications jumped to 8.6% from 5.4%. The average rate for a 5/1 ARM dropped to 5.93% dipping into the magical 5% range. This is either 'The Best Day' ever or a 'Cruel Summer' waiting to happen when that rate adjusts! Choose wisely Swifties. It's like picking the perfect outfit for the Eras Tour – high risk high reward.

Reality Bites: 'Out of the Woods' (But Not Really)

But hold on to your hats because just when you thought you were 'Out of the Woods,' mortgage rates decided to pull a 'We Are Never Ever Getting Back Together' and shot back up. Apparently tariff updates and inflation data are the real villains here. As Matthew Graham from Mortgage News Daily says keep an eye on the inflation data this week. It's like waiting for the Grammys – you never know what's going to happen! This whole situation makes me wanna write a song.