Fewer apply for home loans as borrowing costs, rising prices shut out many
U.S. home loan applications are the lowest in decades as evidence mounts that rising mortgage rates and home prices are shutting out many aspiring homeowners
LOS ANGELES — U.S. home loan applications are the lowest in decades as evidence mount that rising mortgage rates and home prices are shutting out many aspiring homeowners.
An index that tracks mortgage application volume shows applications for loans to buy a home fell last week to the lowest level in 28 years, according to the Mortgage Bankers Association.
The MBA's home loan application index shows that home purchase loans fell 2.1% last week from the prior week to a seasonally adjusted reading of 141.9. That's down about 28% from a year earlier and represents the lowest level for the index since April 1995.
«Both purchase and refinance applications fell, with the purchase index hitting a 28-year low, as prospective buyers remain on the sidelines due to low housing inventory and elevated mortgage rates,” said Joel Kan, the MBA’s deputy chief economist.
Mortgage rates have been climbing in recent weeks, echoing a steady rise in the 10-year Treasury yield, which lenders use as a guide to pricing loans.
The average rate on the benchmark 30-year home loan was 6.48% at the start of this year, falling as low as 6.12% in February, according to mortgage buyer Freddie Mac. Since then, its been hovering around 7%, in-line with the average seen near the turn of the century.
High rates can add hundreds of dollars a month in costs for borrowers, limiting how much they can afford in a market already unaffordable for many Americans. They also discourage homeowners who locked in low rates two years ago from selling, a trend that's helped keep the inventory of previously occupied
Read more on abcnews.go.com
