Home News ‘No sign of a rebound’: Mortgage applications hit 22-year lows, as home buyers pull back

‘No sign of a rebound’: Mortgage applications hit 22-year lows, as home buyers pull back

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Number: With mortgage rates approaching 6%, home buyers remain on the sidelines, delaying purchases and refinancing.

Weak demand from buyers is reflected in the Composite Market Index, which measures mortgage application volume. The Mortgage Bankers Association (MBA) said Wednesday that the index was at its lowest level in 22 years.

The market index fell 0.8% to 258.1 in the week ending Sept. 2. A year ago, the index was 705.6.

Big picture: fee and housing prices Buyers are choosing to wait as there are no signs of a sharp drop in the short term. That means the housing market is likely to continue to slump.

Some sellers and builders are so reluctant to drop buyer demand that Pivot to the rental market.

But in such a depressing situation, things are likely to turn around soon, MBA said.

“Recent economic data is likely to prevent a significant decline in mortgage rates in the near term, but the August data show that there is no significant decline in mortgage rates,” said Mike Fratantoni, senior vice president and chief economist at the MBA. A strong job market should support housing demand,” the statement said.

In other words, rates are unlikely to fall significantly, but better job market That means people can afford more. moreover, house stock is also increasing. That will “eventually lead to increased buying activity,” Fratantoni said.

But so far, “there is still no sign of a recovery in purchase offers,” he added.

Key details: The Refinance Index fell 1.1%, down 83% from a year ago.

The Purchase Index, which measures mortgage applications for home purchases, fell 0.7% from the previous week.

The average 30-year mortgage contract rate for homes sold at $647,200 was 5.94% in the week ending Sept. 2, according to MBA. That was up from 5.8% the week before.

The 30-year average rate for homes sold for $647,200 and above was 5.46%. 15 years he rose to 5.23%.

Rates on variable rate mortgages, which accounted for 8.5% of total applications, rose to 4.81%.

market reaction: 10-year government bond yield

It fell to 3.31% in early morning trading.

Thinking about the housing market? Write to MarketWatch reporter Aarthi Swaminathan ([email protected]).

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