The end of 2022 was not kind to residential real estate investors or those whose agencies sell and finance homes. Not only did mortgage interest rates climb again at the end of December, but applications were down by double digits, according to the Mortgage Bankers Association (MBA).
The average interest rate for 30-year fixed mortgages for loans with a 20% down payment increased to 6.58% from 6.34% two weeks before. For reference, the rate was 3.33% at the end of 2021. Meanwhile, mortgage applications were down 13.2% at the end of 2022 compared to two weeks earlier. To add to the negative news, the demand for refinancing dropped 16.3% from two weeks earlier and 87% from the same period in 2021.
Realtor.com predicts mortgage rate increases will continue into 2023 and will hover around 7.1% by the end of the year. Straining to find any good news at all, Realtor.com added, “Remember, that’s lower than the 7.76% average rate seen in 30-year mortgages since 1971.”
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