Mortgage applications fell to their lowest level since the turn of the century earlier this month, the combination of rising mortgage rates, low housing stock, soaring inflation and Historically high home prices have sidelined many potential buyers.
See: Are you a Gig Worker buying a house? Here’s Why You Should Use a Banker or Mortgage Broker
Find: What to do if mortgage rates upend your home buying plans
Weekly U.S. mortgage application volume fell 6.5% in the week ending June 3, 2022, according to the Mortgage Bankers Association (MBA) Weekly Mortgage Application Survey. The result included an adjustment for the Memorial Day holiday.
On an unadjusted basis, the index fell 17% from the previous week. The refinancing index fell 6% and ended the week down 75% from the same period a year earlier. The unadjusted buy index was down 18% from the previous week and 21% from a year earlier.
Weak purchase and refinancing requests pushed the market index to its lowest level in 22 years, Joel Kan, associate vice president of economic and industrial forecasting at the MBA, said in a press release. The market was penalized by a rise in the 30-year fixed mortgage rate, which climbed to 5.4% during the week after three consecutive declines.
“While rates were still lower than they were four weeks ago, they remain high enough to continue suppressing refinancing activity. Only government refinancings saw a slight increase last week,” said Kan. “The buying market has been hurt by persistently low housing inventories and soaring mortgage rates in recent months. These worsening affordability issues have been particularly difficult for potential home buyers.” a first home.”
Mortgage rates rose again early this week, CNBC reported, citing a separate Mortgage News Daily survey. Rates have been in a tight range for several weeks after pushing much higher earlier in the year.
“It is possible that the upper limits of this range will eventually form a ceiling for rates, but that will depend on inflation and other incoming economic data,” wrote Matthew Graham, chief operating officer at Mortgage News Daily. , in a footnote.
POLL: Do you have a side concert or other activity?
Discover: Pay the PMI? Here’s how to eliminate monthly mortgage fees
Meanwhile, average U.S. home prices in March rose 20.6% from a year earlier — the biggest gain in more than 35 years of data — according to the S&P CoreLogic Case Index. -Shiller US National Home Price NSA, released May 31.
More from GOBankingRates