Mortgage demand, which has suffered four straight months of declines, fell last week to the lowest level since 1997, as interest rates continued to rise.
Homebuyers’ demand for mortgages dropped 4% for the week and was 38% lower than the same week one year ago, according to the Mortgage Bankers Association. Applications to refinance a home loan fell 7% compared with the previous week, in seasonally adjusted terms. Demand was 86% lower than the same week one year ago.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 6.94% from 6.81%, with points decreasing to 0.95 from 0.97 (including the origination fee) for loans with a 20% down payment. That is the highest rate since 2002 on the MBA’s index.
Higher rates and falling buyer demand caused homebulder sentiment to drop again on the National Association of Home Builders index. Builder sentiment, now well into the negative range, is half of what it was just six months ago.
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