Mortage Demand Plummets to 22-Year Low

Mortgage applications dropped 6.5% last week, and demand reached the lowest point in 22 years, the Mortgage Bankers Association reported Wednesday. The index reflects applications for refinancings and home purchases.

Mortgage applications for a home purchase, a gauge of homebuying, dropped 7% for the week and are now 21% lower than a year ago, the MBA reports. Refinance applications dropped another 6% this week and are 75% lower than the same week a year ago.

Rising mortgage rates have been chipping away at affordability. The average contract interest rate for a 30-year fixed-rate mortgage with a 20% down payment rose to 5.40% compated to 5.22% the previous week, the MBA reports.

Mortgage rates are still low by historical standards. But a year ago, the 30-year fixed-rate mortgage averaged below 3%. Home buyers are also facing higher home prices that are up by double-digit percentages annually.

"The purchase market has suffered from persistently low housing inventory and the jump in mortgage rates over the past two months," says Joel Kan.

Works Cited:

“Mortgage Demand Plummets to 22-Year Low.” Realtor Magazine, 9 June 2022, magazine.realtor/daily-news/2022/06/09/mortgage-demand-plummets-to-22-year-low.

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