Mortgage demand plummets again despite drop in interest rates
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 slumped over the holidays despite a sharp drop in mortgage rates over the course of December.
The Mortgage Bankers Association's (MBA) index of mortgage applications fell 9.4% for the week ended Dec. 29, compared with two weeks earlier, according to new data published Wednesday.
The data also showed that the average rate on the popular 30-year loan ended the year at 6.76%. While that is down from a peak of 8% in October, it is slightly higher than it was the previous week.
«Markets continued to digest the impact of slowing inflation and potential rate cuts from the Federal Reserve, helping mortgage rates to stay at levels close to the lowest since mid-2023,» said Joel Kan, MBA's deputy chief economist. «The recent decline in rates has given the housing market some cause for optimism going into 2024, but purchase applications have not yet picked up in response.»
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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)
Housing demand remained muted even with the recent drop in rates. Applications for a mortgage to purchase a home dropped 5% from two weeks earlier. Application volume is down 12% compared with the same time last year.
Demand for refinancing also fell last week, declining 18% from the previous two weeks, according to the survey. Compared with the same time
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