A surge in inflation and interest rates is weighing on the housing market and hammering American consumers.
According to the Mortgage Bankers Association, mortgage demand fell last week to its lowest level since 2000.
With rates almost doubled since early this year, buyers have lost considerable purchasing power.
With higher interest rates and inflation hammering the American consumer, the mortgage market is only getting worse.
According to the Mortgage Bankers Association's seasonally adjusted index, mortgage demand dropped more than 6% last week compared with the previous week.
Compared to the same week in 2021, mortgage applications dropped 7% and were 19% lower for the week.
Since January, buyers have been dealing with high prices, but now with interest rates almost twice what they were then, they have lost a lot of purchasing power.
The weak economic outlook, high inflation, and persistent affordability challenges are impacting buyer demand, according to Joel Kan, MBA economist.
Weekly interest rate movements affect buyers less, but rising rates have already had an impact on the broader market. After a slight decline over the last three weeks, mortgage rates climbed again last week.
A 30-year fixed-rate mortgage with a 20% down payment increased from 5.74% to 5.82%, and points increased from 0.59 to 0.65 (including origination fees). It was 3.11% one year ago.
A 30-year fixed-rate mortgage with a 20% down payment increased from 5.74% to 5.82%, and points increased from 0.59 to 0.65 (including origination fees). It was 3.11% one year ago.
The refinance demand for the week fell 4% and was 80% lower than a year ago. Refinance activity increased to 31.4% from 30.8% last week due to a drop in demand from homebuyers.