A home for sale real estate sign is seen in front of a home in Arlington, Virginia on November 19, 2020.
Saul Loeb | AFP | Good pictures
According to the Mortgage Bankers Association, mortgage demand fell by nearly half last week from a year ago as rates hit their highest levels in 21 years.
Overall, demand for mortgages is at its lowest level since 1997.
Mortgage applications to buy a home fell 2% from the previous week and fell 42% from the same week in 2021. The year-over-year comparison continues to increase each week as more people want to enter or can afford to enter this expensive housing market. .
Applications for home loan refinancing fell just 0.1% on the week, but that’s only because they were much lower to begin with — down 86% from a year ago. According to Black Knight, there are currently less than 150,000 qualified borrowers who could benefit from today’s rate refinancing.
Mortgage rates eased slightly to start this week, but are still high at 7% after starting the year at 3%. The average contract interest rate for 30-year fixed-rate mortgages increased from 6.94% to 7.16% for payments ($647,200 or less).
Federal Housing Administration loans, with lower rates and smaller down payment requirements, rose slightly during the week.
“Despite higher rates and lower overall application activity, there has been a slight increase in FHA purchase applications because FHA rates are lower than conventional loan rates,” said Joel Kahn, economist at the Mortgage Bankers Association.
The share of homebuyers applying for adjustable-rate mortgages more than quadrupled from earlier this year. ARMs offer lower rates, but are considered a riskier product.
Higher interest rates also weigh on housing prices. While prices are still higher than a year ago, there are gains Now decreasing At record speed. Homebuyers are also rethinking their purchases. Pulte Group It reported a 24% cancellation rate in its latest quarterly earnings report on Tuesday and said it expects an even higher rate next quarter.