Mortgage demand jumps again as rates fall to lowest level since August
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.'
A key measure of home-purchase applications rose for the fifth straight week as an ongoing drop in mortgage rates reignited demand among consumers.
The Mortgage Bankers Association's (MBA) index of mortgage applications rose 2.8% last week, compared with the previous week, according to new data published Wednesday.
The data also showed that the average rate on the popular 30-year loan dropped to 7.17% – the lowest level since August. That is also a notable drop from just one month ago, when rates hovered around 7.91%.
«Slower inflation, and financial markets anticipating the potential end of the Fed’s hiking cycle, are both behind the recent decline in rates,» said Joel Kan, MBA's vice president and deputy chief economist.
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Available home supply remains down a stunning 45.1% from the typical amount before the COVID-19 pandemic began in early 2020, according to a recent report from Realtor.com. (David Paul Morris/Bloomberg via / Getty Images)
The decline in rates helped to spur more housing demand, with applications for a mortgage to purchase a home climbing 35% for the week. Still, application volume remains down 17% compared with the same time last year as the housing market continues to face chronically low inventory and an affordability crisis.
It also sparked fresh demand for refinancing, which surged 14% from the previous week and is up 10% from the same week one year ago.
«Refinance applications saw the strongest week in two months, increasing on a year-over-year
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