Mortgage demand falls to lowest level in 22 years


Realtors Rosa Arrigo, center, and Elisa Rosen, right, work at an open house in West Hempstead, New York.

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Mortgage rates have started to rise again, after a brief dip in May, and the housing market is still suffering from a lack of listings. As a result, demand for mortgages continues to decline.

Total mortgage application volume fell 6.5% last week from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Demand is at its lowest level in 22 years.

The average contractual interest rate for 30-year fixed rate mortgages with conforming loan balances ($647,200 or less) fell from 5.33% to 5.40%, with points rising from 0, 51 to 0.60 (including origination fees) for loans with a 20% decline. Payment.

Refinancing demand, which is most sensitive to weekly rate movements, fell another 6% for the week and was 75% lower than the same week a year ago. The vast majority of mortgage holders now have significantly lower rates than they do today, and even those who want to get cash out of their homes are choosing second mortgages over refinancing their first liens.

“While rates were still lower than they were four weeks ago, they remained high enough to further suppress refinancing activity. Only government refinancings saw a slight increase last week,” said Joel Kan, MBA economist.

Mortgage applications for buying a home fell 7% for the week and were 21% lower than the same week a year ago.

“The buying market has been hurt by a persistently low housing inventory and soaring mortgage rates over the past two months. These worsening affordability issues have been particularly difficult for potential first-time buyers. “, Kan said.

Mortgage rates rose even more to start this week, according to a separate survey by Mortgage News Daily. Rates have been in a narrow range for several weeks after rising sharply in previous months.

“It is possible that the upper limits of this range will eventually form a ceiling for rates, but that will depend on inflation and other incoming economic data,” wrote Matthew Graham, chief operating officer at Mortgage News Daily. . “With a key inflation report due out on Friday morning, the potential for volatility remains high.”


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