Demand Falls Despite Favorable Mortgage Rates

According to the Mortgage Bankers Association's Weekly Applications Survey, average mortgage rates were up and down last week. Rates fell week-over-week for 30-year fixed-rate loans with conforming loan balances and those backed by the Federal Housing Administration, but increased for 15-year fixed-rate mortgages and jumbo loans. Despite the movement, however, rates across all loan categories remain low by historical standards – even if they're higher than the all-time lows seen in 2020. Last week's rates didn't boost demand, though. In fact, demand for loans to buy homes dropped 3 percent from the week before. Joel Kan, MBA's associate vice president of economic and industry forecasting, says there are a few factors holding buyers back. “Mortgage applications decreased for the second week in a row, with the overall index reaching its lowest level since February 2020,” Kan said. “Tight housing inventory, obstacles to a faster rate of new construction, and rapidly rising home prices continue to hold back purchase activity.” The MBA's weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

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