Mortgage demand tumbles as interest rates rise to highest level since December
Realtor.com chief economist Danielle Hale breaks down housing affordability on 'Maria Bartiromo's Wall Street.'
A key measure of home-purchase applications slumped last week amid a sharp increase in mortgage rates.
The Mortgage Bankers Association's (MBA) index of mortgage applications fell 2.3% for the week ended Feb. 9, 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 rose to 6.87%. While that is down from a peak of 8% in October, it marks the highest level for interest rates since December 2023.
«Application activity was weaker last week, as mortgage rates moved higher across the board,» said Joel Kan, MBA's deputy chief economist.
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Homes in Hercules, California, on Dec. 26, 2023. (Photographer: David Paul Morris/Bloomberg via Getty Images / Getty Images)
Housing demand has stalled out as rates move higher. Applications for a mortgage to purchase a home dropped 3% from the previous week. Application volume is down 12% compared with the same time last year.
Demand for refinancing also fell last week, declining 2% from the previous two weeks, according to the survey. Compared with the same time last year, refinance applications are up about 12%.
«Purchase applications remained subdued as elevated rates continue to add to affordability challenges along with still-low existing housing inventory,» Kan said. «Refinance applications declined and remained depressed, with rates still higher than a year ago.»
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