Mortgage demand falls to lowest level since 1995 as rates surge
foxbusiness.comFOX 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.'
A key measure of home-purchase applications tumbled last week to a nearly three-decade low as consumer demand cooled sharply amid a recent surge in mortgage rates.
The Mortgage Bankers Association's index of mortgage applications fell 4.2% last week to the lowest level since 1995, according to new data published Wednesday.
The data also showed that the average rate on the popular 30-year loan climbed to 7.31% from 7.16% the previous week, the highest level since December 2000. By comparison, just one year ago, rates hovered around 5.65%.
«Treasury yields continued to spike last week as markets grappled with illiquidity and concerns that the resilient economy will keep inflation stubbornly high,» said Joel Kan, MBA's deputy chief economist.
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Homes in Hercules, California, on Aug. 16, 2023. (David Paul Morris/Bloomberg via / Getty Images)
The steeper rates weighed heavily on housing demand, with applications for a mortgage to purchase a home tumbling 5% for the week. Application volume is down 30% compared with the same time last year.
Demand for refinancing also continued to fall last week, sliding another 3%, according to the survey. Compared with the same time last year, refinance applications are down 35%.
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«Applications for home purchase mortgages dropped to their lowest level since April 1995, as homebuyers withdrew from the market due to the elevated rate environment and the erosion of
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