Mortgage rates over 7% are throttling homebuyer demand
Real estate agent Mauricio Umansky says high mortgage rates, high prices and low supply are creating difficulties for homebuyers on 'The Claman Countdown.'
A key measure of home-purchase applications fell for the fifth week in a row as mortgage rates continued to hover above 7%, throttling demand among would-be buyers.
The Mortgage Bankers Association's (MBA) index of mortgage applications fell 5.6% for the week ended Feb. 23, compared with a 10.6% drop the previous week, according to new data published Wednesday.
The data also showed that the average rate on the popular 30-year loan decreased slightly to 7.04% last week. While that is down from a peak of 8% in October, it remains noticeably higher than the start of the year.
«Higher rates in recent weeks have stalled activity,» said Mike Fratantoni, MBA's chief economist.
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A display home at the Cold Spring Barbera Homes subdivision in Loudonville, New York on Wednesday Nov. 8, 2023. (Photographer: Angus Mordant/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 5% from the previous week. Application volume is down 12% compared with the same time last year.
Demand for refinancing also fell last week, declining 7% from the previous week, according to the survey. Compared with the same time last year, refinance applications are down 1%.
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