Last week, the Mortgage Bankers Association reported a 2.3% drop in mortgage applications, with the average 30-year loan rate reaching 6.87%, the highest level since December 2023.
Housing demand has decreased due to rising rates, leading to a 3% drop in home purchase mortgage applications and a 2% decline in refinance applications.
“Application activity was weaker last week, as mortgage rates moved higher across the board,” economist Joel Kan said.
“Purchase applications remained subdued as elevated rates continue to add to affordability challenges along with still-low existing housing inventory,” Kan said. “Refinance applications declined and remained depressed, with rates still higher than a year ago.”
The Federal Reserve’s aggressive tightening campaign has cooled the interest rate-sensitive housing market, with the inventory limited by higher rates.
Available home supply remains down 34.3% from pre-pandemic levels.
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