Mortgage demand falls to the lowest level since the end of 2018, even as interest rates ease a bit

After rates declined last week, mortgage demand fell to the lowest level since December.

The Mortgage Bankers Association says applications for a mortgage to purchase a home fell 1% last week. The volume was lower a year ago.

Mortgage rates are higher than they were at the beginning of the year.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances decreased to 5.33% from 5.46 with points decreasing to 0.51 from 0.60 for loans with a 20% down payment.

Mortgage rates fell for the fourth time in five weeks, as concerns of weaker economic growth and the recent stock market sell-off drove Treasury yields lower.

Affordability is being hit hard by rising interest rates and steep gains in home prices. Different tiers of buyers are seeing different pictures as prices continue to rise.

Demand is high at the upper end of the market, and the supply and affordability challenges are not as detrimental to these borrowers as they are to first-time buyers.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances decreased. Jumbo loans are usually held in investor and bank portfolios, as opposed to being sold to Fannie Mae or Freddie Mac. They are less risky because of the higher credit quality of the borrowers.

The number of applications to refinance a home loan fell 5% for the week and were 75% lower than a year ago. When rates were at record lows last year, so many borrowers went through the process that demand for refinance hasn't come back.

According to a read from Mortgage News Daily, mortgage rates began to go up due to the volatility in global markets.

Matthew Graham, COO of Mortgage News Daily, wrote that high inflation in Europe and the easing of Covid-related lockdowns in China took a toll on bonds.