Mortgage refinance demand plunges 60%, as rates hit their highest level since 2018
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 4.80% from 4.50%. Refinance applications fell 15% for the week and were down 60% from a year ago. Homebuyer mortgage demand rose 1% for the week but was down 10% from a year ago. “Mortgage rates jumped to their highest level in more than three years last week, as investors continue to price in the impact of a more restrictive monetary policy from the Federal Reserve,” said Michael Fratantoni, MBA’s chief economist. Driving the downturn in overall mortgage demand was a 15% weekly drop in refinance applications. They are now down a whopping 60% from a year ago. The refinance share of mortgage activity decreased to 40.6% of total applications from 44.8% the previous week.
- https://www.cnbc.com/2022/03/30/mortgage-refinance-demand-plunges-60percent-as-rates-hit-their-highest-level-since-2018.html
It is definitely a bad time to be a first-time house buyer in this market due to the extremely high mortgage rates. It seems as though they have been high all year due to the increase in demand despite the high rates.
ReplyDeleteIt seems to me like everything to do with housing including both mortgages and rent have been creeping up over time. Unfortunately, it makes things very difficult for anyone who does not have either to pay. It is unclear what will happen in the future, but it does not seem to be slowing down anytime soon. I think this could turn into a more serious crash not dissimilar to 2008.
ReplyDeleteAs we talked about in class the other day it is really bad timing for college graduates within the next few years. Housing prices rising is going to make it even more difficult to live in areas with higher price of living. Hopefully there will be an increase in salary for entry level positions to help combat this.
ReplyDelete