Connect with us


Mortgage demand lowest in 22 years, economic downturn a catalyst




The ongoing inflation and mortgage rate hikes in the country have led to a dramatic decline in home purchases.

Mortgage application volumes are down 6.5%, which is the lowest on record in over 22 years. Meanwhile, contract interest rates for 30-year fixed-rate mortgages with loan balances increased to 5.40% from 5.33%. In addition, the points increased from 0.60 for loans that need a 20% down payment.

The economic climate has had an adverse effect on refinancing demand. Refinancer’s interest in obtaining a new mortgage was 75% lower than last year’s number.

An economist at the MBA said, “While rates were still lower than they were four weeks ago, they remained high enough to still suppress refinance activity. Only government refinances saw a slight increase last week.”

In recent data, the number of people applying for mortgages to buy homes has gone down by 7%. This is 21% lower than last year’s data.

“The purchase market has suffered from persistently low housing inventory and the jump in mortgage rates over the past two months. These worsening affordability challenges have been particularly hard on prospective first-time buyers,” the MBA economist added.

Mortgage rates are always fluctuating, but it seems like this time around, they’re changing more than usual, and it’s constantly on the upswing. Mortgage Daily News said mortgage subscribers and providers would feel the effects of these changes in aggressive ways with hurtful results for both parties alike.

The chief operating officer of the Mortgage Daily News said, “There’s some chance that the upper boundaries of that range end up being a ceiling for rates, but that will depend on inflation and other incoming economic data.”

“With a key inflation report set to release on Friday morning, the potential for volatility remains high,” he added.

Source: CNBC

Alice's experience as a first-generation immigrant has given her a unique perspective on entrepreneurship. She understands the challenges that minorities and women face in the tech industry, and her writing often highlights the importance of diversity and inclusion in entrepreneurship. Alice's writing is also characterized by her fearless approach to risk-taking and her belief in the power of innovation.