More and more people are being priced out of the market because of rising interest rates.
The Mortgage Bankers Association's index shows that the total mortgage application volume fell last week. The volume was down from a year ago.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances increased to 4.90% from 4.80%, with points decreasing to 0.53 from 0.56 for loans with a 20% down payment. The rate was 3.36 a year ago. That is the fourth week in a row of increases.
The number of applications to refinance a home loan has been falling for months. The demand for a mortgage was lower last week than it was a year ago.
Mortgage application volume continues to decline due to rapidly rising mortgage rates, as financial markets expect significantly tighter monetary policy in the coming months.
The share of applications that were refinanced fell from a year ago.
The number of mortgage applications to purchase a home was 9% lower than a year ago. The supply of existing homes for sale is extremely lean because of a strong employment market with continued wage growth. The exception tends to be the bidding wars. Entry-level buyers are being excluded because of falling affordability.
The elevated average purchase loan size is indicative of first-time buyers being disproportionately impacted by supply and affordability challenges.
The drop in mortgage business is causing layoffs at companies. Mortgage companies had been on a hiring spree in the first year of the Covid pandemic, as interest rates set more than a dozen record lows.
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