Mortgage demand falls to the lowest level since 1995 as interest rates near 8%
Mortgage demand has fallen to its lowest level since 1995, as mortgage interest rates have risen close to 8%. The Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey showed a 4% decrease in overall mortgage demand since the prior week. As rates surge, the purchase loan index dropped 3% from the prior week, with a drop of 6% for purchase loans backed by the Federal Housing Administration (FHA).
Homebuyers are increasingly being priced out of the market as rising mortgage rates make it more expensive to purchase a home. The average rate for a 30-year fixed loan hit 7.94%, the highest level since 2011. With a rise of .8% from the week prior, the current monthly payments for a median-priced home have reached $1,845, the highest since July 2008.
On the other hand, demand for refinance loans have increased due to the higher rates, with the refinance share of all applications reaching 70.9%, the highest of the year.
With the current economic situation, rising rates, and the near exhaustion of non-repayable government stimulus, the outlook for housing in the near term remains uncertain, with many expecting demand to stay weak in the foreseeable future.