Home purchase mortgage applications were 19% lower than the same week in July last year, and 6% lower than the prior week. Those numbers are a direct reflection of the impact inflation is having on our economy.
In a recent article submitted by Diana Olick on CNBC, she reports that weekly mortgage demand from homebuyers tumbled 12%, as higher interest rates take their toll. She makes these key points:
If you have kept an eye on mortgage interest rates as they climb to the highest point in years, it’s no surprise to read this article on MortgageNewsDaily state “The Mortgage Bankers Association’s (MBA) latest weekly mortgage application data shows an ongoing and unsurprising decline in refinance applications.” In light of increased prices and rising rates it is interesting to note that purchase application volume is only seeing a slight decline.
Rapidly rising mortgage interest rates are having a direct impact on mortgage application volumes, particularly for mortgage refinance applications. In an article by Adam DeSanctis for the Mortgage Bankers Association (MBA) “The Market Composite Index, a measure of mortgage loan application volume, decreased 8.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 8 percent compared with the previous week. The Refinance Index decreased 14 percent from the previous week and was 54 percent lower than the same week one year ago.”
Whether you are in the market to buy or refinance a home, everyone is talking about the rising mortgage interest rates! Many predictions and questions are included in conversations on this topic, along with the variety of national and worldwide changes that are affecting the rates.
Recent months have seen a reduction in residential mortgage applications. There are varying speculations as to the reasons for this decline in applications:
Residential Purchase Mortgage Applications posted the largest increase since early July, which many sources say is a result of increased inventory and slightly reduced mortgage interest rates.
Home sales were strong throughout 2020, with purchase applications up 42% in December 2020 compared to same period in 2019. These results are much better than many projected in early 2020, when the Covid Pandemic brought our nation to a standstill for months. The historically low mortgage interest rates in 2020 is the clear reason for the stellar home sales market performance.