Sign In  |  Register  |  About San Anselmo  |  Contact Us

San Anselmo, CA
September 01, 2020 1:33pm
7-Day Forecast | Traffic
  • Search Hotels in San Anselmo

  • CHECK-IN:
  • CHECK-OUT:
  • ROOMS:

Mortgage demand plummets as interest rates soar higher

Home-purchase applications plummeted 8.8% last week as higher mortgage weighed on demand, according to a new survey from the Mortgage Bankers Association.

A key measure of home-purchase applications fell sharply last week as consumer demand cooled in the face of higher mortgage rates.

The Mortgage Bankers Association’s index of mortgage applications tumbled 8.8% last week for the first time in months, according to new data published on Wednesday. 

"Last week’s increase in mortgage rates prompted a pullback in application activity," said Joel Kan, MBA’s deputy chief economist. "With more first-time homebuyers in the market, we continue to see increased sensitivity to rate changes."

COMMERCIAL REAL ESTATE MARKET COULD CRASH SOON. HERE’S WHY

Demand for refinancing also continued to plunge last week, tumbling another 6%, according to the survey. Compared with the same time last year, refinance applications are down a stunning 56%.

"Rates remained more than a full percentage point above the same week a year ago," Kan said. "This leaves very little refinance incentive for most homeowners."

The interest rate-sensitive housing market has cooled rapidly in the wake of the Federal Reserve's aggressive tightening campaign. 

ECONOMIST WHO CALLED 2008 HOUSING CRASH PREDICTS ANOTHER 15% DROP IN HOME PRICES

Policymakers already lifted the benchmark federal funds rate nine consecutive times and have signaled that a 10th increase is on the table at their May meeting amid signs of underlying inflationary pressures within the economy.

For months, higher mortgage rates have dampened consumer demand and brought down home prices. As rates have slowly fallen from a peak of 7%, the housing market has shown early signs of stirring back to life.

However, the return to lower mortgage rates has not been smooth. In fact, rates moved significantly higher to start the week, according to a separate survey from Mortgage News Daily, with the average rate on the popular 30-year mortgage for homes sold for $726,200 or less climbing to 6.43% from 6.30%. 

For homes sold over $726,200, the average rate for the 30-year was 6.28%. 

Those rates remain significantly higher than just one year ago, when rates hovered around 5%.

GET FOX BUSINESS ON THE GO BY CLICKING HERE 

Limited inventory has also bolstered demand and prices this month. 

A recent report from Realtor.com showed that the number of available homes on the market in March is down more than 50% from the typical amount before the pandemic began.

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.
 
 
Copyright © 2010-2020 SanAnselmo.com & California Media Partners, LLC. All rights reserved.