Housing demand stalls out as mortgage rates march higher
FOX Business correspondent Madison Alworth shares why for many first-time homebuyers, the American dream is delayed as a result of high mortgage rates and home prices on 'Varney and Co.'
Housing demand ground to a halt last week as mortgage rates inched closer to 7%, squeezing many would-be buyers out of the market ahead of the pivotal spring season.
The Mortgage Bankers Association's (MBA) index of mortgage applications rose 3.7% last week, compared with the previous week, according to new data published Wednesday. But the increase was entirely due to current homebuyers who refinanced their mortgages.
Applications for a mortgage to purchase a home fell 1% compared with the previous week as high mortgage rates continued to limit housing supply; application volume remains down 19% compared with the same time last year.
«Purchase activity has been strong to start 2024 compared to the final quarter of 2023,» said Joel Kan, an MBA economist. «However, activity is still weaker than a year ago because of low housing supply.»
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Available home supply remains down a stunning 34.3% from the typical amount before the COVID-19 pandemic, according to one report. (David Paul Morris/Bloomberg via / Getty Images)
The data also showed that the average rate on the popular 30-year loan rose to 6.8% from 6.78% the previous week. However, that does not take into consideration the sharp jump in mortgage rates that took place after the January jobs report came in much stronger than expected.
Rates on the 30-year loan surged 29 basis points on Friday – the largest one-day jump in more than a year – and continued to trend higher on Monday, crossing 7% for the first time since
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