Purchase mortgage applications fell to a 28-year low last week
Home mortgage applications fell 5.7% last week to a 28-year low as higher interest rates deterred homebuyers, according to the Mortgage Bankers Association.
- Purchase mortgage applications fell by 5.7% last week.
- The Mortgage Bankers Association’s purchasing index fell to a 28-year low for the second week in a row.
- Mortgage rates have jumped 50 basis points in the past month.
The Weekly Mortgage Applications Survey’s purchase index was 44% lower than the same week a year ago. For a second week, it is near a three-decade low.
The refinancing index also fell 6% from a week earlier and was 74% lower than the same week a year ago.
The MBA attributed the declines to rising mortgage rates after falling over the winter. The average interest rate on a 30-year fixed-rate loan is 6.71 percent, compared with 4 percent a year ago, MBA said.
“After a brief revival in application activity in January, when mortgage rates fell to 6.2%, there have now been three consecutive weeks of falling applications as mortgage rates jumped 50 basis points in the past month,” Joel Kahn, MBA vice president and deputy chief economist, said in a statement.
Consumer concerns about inflation and the possibility of a recession are affecting the market across all sectors, according to the MBA.
“Inflation, employment and economic activity data signaled that inflation may not cool as quickly as expected, continuing to put pressure on interest rates,” Kahn said.
The average contract rate for 30-year fixed-rate mortgages with loan balances of $726,000 or less increased to 6.71% from 6.62%, with points increasing to 0.77 from 0.75 for loans with a 20% down payment.
The average contract rate for 30-year fixed-rate mortgages with loan balances over $726,000 was unchanged at 6.44%, with points down from 0.49 from 0.53 for loans with an 80% loan-to-value ratio.