Financial markets digest Trump presidency, causing mortgage demand to stall.

• The interest rate for 30-year fixed-rate mortgages with conforming loan balances of $766,550 or less rose from 6.81% to 6.86%.
• Since May, the number of applications to refinance a home loan has decreased the most when interest rates change weekly.
• The number of mortgage applications for purchasing a home increased by 2% during the week and was 1% higher compared to the same week last year.

Last week, mortgage rates increased as investors evaluated the economic outlook under a Trump administration, while the mortgage market remained relatively stable.

The Mortgage Bankers Association's seasonally adjusted index showed that total application volume rose by 0.5% last week, marking the first increase in overall demand in seven weeks.

The interest rate for 30-year fixed-rate mortgages with conforming loan balances of $766,550 or less increased to 6.86% from 6.81%, with points decreasing to 0.60 from 0.68, including the origination fee, for loans with a 20% down payment.

"Last week, mortgage rates rose due to the increase in Treasury yields, as financial markets assessed the potential effects of a Trump presidency, according to Joel Kan, the Mortgage Bankers Association's deputy chief economist. Despite the Federal Reserve's 25-basis-point rate cut, it had minimal impact on the markets."

Weekly applications to refinance a home loan decreased by 2% to their lowest level since May. Despite this, they were 43% higher than the same week one year ago. Mortgage rates were 75 basis points higher last year at that time.

The number of mortgage applications to purchase a home increased by 2% during the week, which was 1% higher than the same week last year. Despite the possibility of lower interest rates, homebuyers are also facing higher home prices. However, the supply of homes available for purchase remains limited.

The purchase activity increased by 3% and 9% due to applications for loans backed by the Federal Housing Administration and the U.S. Department of Veterans Affairs, as noted by Kan.

""While conventional purchase applications increased slightly, FHA mortgage rates were lower than the overall trend, which may have helped some borrowers," Kan stated."

This Tuesday, mortgage rates rose, while the bond market was closed on Monday for the Veterans Day holiday.

"Matthew Graham, chief operating officer at Mortgage News Daily, stated that the market is dealing with election-related volatility, which involves a range of factors. Some of these factors include expectations for changes in fiscal policy in the future, while others are more straightforward, such as traders adjusting their trading positions before the election."