Mortgage rates approach 8% as lenders cut jobs

Home financing grew more expensive again Tuesday. The average for a conforming mortgage with a 30-year term reached 7.63%. That figure gained 31 basis points over two weeks. FHA borrowing rose even faster, adding 59 basis points during the same period. Jumbo mortgages increased 45 basis points. Higher costs have further strained affordability for buyers and reduced interest among borrowers seeking refinances.

The rapid climb is also squeezing mortgage companies. Some lenders have lowered their loan-production expectations, reduced staffing, closed locations or withdrawn from parts of the market. Recent changes include Benchmark Mortgage leaving two business-to-business channels, New American Funding cutting consumer-direct positions and Pennymac trimming certain teams while shutting a Tennessee location.

The industry is also looking at other ways to ease monthly costs or help more applicants qualify. Federal housing regulators have brought VantageScore 4.0 into the process for mortgages purchased by Fannie Mae and Freddie Mac. United Wholesale Mortgage CEO Mat Ishbia said greater competition among scoring systems could reduce some pricing adjustments and mortgage-insurance expenses. He also said newly aligned cancellation policies for that insurance may provide modest savings for certain existing borrowers without a refinance.