Mortgage demand falls again as interest rates soar past 7%

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DFW housing and macro economic analyst Amy Nixon says the longer rate cuts hold off, the higher rates have to stay on 'Making Money.'

A key measure of home-purchase applications fell again last week as mortgage rates rose to the highest level in five months.

The Mortgage Bankers Association's (MBA) index of mortgage applications slid 2.7% for the week ended April 19, according to new data published Wednesday. 

The data also showed that the average rate on the popular 30-year loan rose to 7.24% last week. While that is down from a peak of 8% in October, it marks the highest level for interest rates since November.

«Mortgage rates continued to move higher last week, reaching their highest levels since late 2023 and putting a damper on applications activity,» said Mike Fratantoni, MBA's chief economist.

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A home for sale in Cupertino, California, on Feb. 7. (Loren Elliott/Bloomberg via Getty Images / Getty Images)

Housing demand has ground to a halt as rates move higher. Applications for a mortgage to purchase a home dropped 1% from the previous week. Application volume is down 15% compared with the same time last year.

Demand for refinancing also fell last week, tumbling 6% from the previous week, according to the survey. Compared with the same time last year, refinance applications are up just 3%.

THE COST OF BUYING A HOUSE HIT ANOTHER RECORD HIGH AS MORTGAGE RATES SPIKE AGAIN

The interest rate-sensitive housing market has cooled rapidly as a result of the Federal Reserve's aggressive tightening campaign. Policymakers lifted the benchmark federal funds rate 11 times over the course of 16 meetings in an attempt to crush stubborn inflation and slow the economy.