According to a survey reported by Mortgage Banker Association (MBA) on Wednesday, mortgage applications in the United States saw another drop last week. This marks the fourth consecutive week that mortgage demand has been in decline.
The MBA reported that last week’s volume of mortgage applications took a 0.7 percent dip. This came after a 13.1 percent drop in the week prior, resulting in the lowest level of demand for mortgages since late 2019.
The mortgage market’s refinancing and prepayment activity, on the other hand, saw a slight increase of 1 percent, although it remains 56 percent lower compared to the same period last year.
Shy applications activity was caused by the soaring interest rates that averaged 4.15 percent on a 30-year fixed mortgage last week. This was the highest interest rates have been since December 2019.
“Although there was an increase in government refinance applications, higher rates continue to push potential refinance borrowers out of the market,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting.
Mortgage rates are expected to go down in the following weeks, causing the volume of mortgage applications to rebound. However, the ongoing geopolitical crisis and concerns about inflation will continue to bring uncertainty to the market.
