According to an industry report released Wednesday, demand for US mortgages has dropped by nearly a third over the past year as a key interest rate spiked for the first time in more than a decade.
The Mortgage Bankers Association said in a weekly update that the number of mortgage purchase applications in the week ended September 9 was down 29% from the year before.
The total loan application volume went down. The index fell 4% from a week ago and was lower than it was a year ago.
The 30-year fixed mortgage rate reached the 6.05% mark for the first time since 2008 and doubled what it was a year ago.
"Rising mortgage rates and elevated home prices continue to have a huge impact on affordability and home buyer confidence levels, and we expect to see home prices begin to fall on a national basis in July/August."
Mortgage rates have followed the rise in Treasury yields this year, with the Federal Reserve increasing interest rates in order to lower inflation. The 10-year Treasury yield was 3.41% on Thursday, compared with 1.51% at the end of the previous year.
According to the update, higher mortgage rates have contributed to more homebuyers staying on the sidelines.
He said that government loans, which first-time buyers tend to favor, bucked the trend of declines and increased over the week.
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