Mortgage refinancing demand drops 60% as interest rates hit highest level since 2018

People wait to visit a home for sale in Floral Park, Nassau County, New York.

Wang Ying | Xinhua News Agency | beautiful pictures

Mortgage rates rose again last week, to the detriment of existing borrowers who may want to refinance. However, demand from homebuyers seems to be waning.

Total mortgage applications fell 6.8% last week from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. This is because the average contract rate for 30-year fixed-rate mortgages with matching loan balances ($647,200 or less) increased to 4.80% from 4.50%, with a decreasing score. down to 0.56 from 0.59 (including principal) for loans with 20% Prepayment.

“Mortgage interest rates rose to their highest levels in more than three years last week, as investors continued to price in the impact of restrictive monetary policy,” said Michael Fratantoni, chief economist at MBA. than from the Federal Reserve”.

Driving the downturn in overall mortgage demand was a 15% weekly decline in refinance applications. They are now down 60% from a year ago. Mortgage’s refinance rate fell to 40.6% of total applications from 44.8% the previous week.

Mortgage applications for a home rose 1% for the week but were 10% lower than the same week a year ago. Homebuyers today continue to face sky-high prices and record low supply, alongside rising mortgage rates. Affordability is waning significantly, but some real estate agents say the competition hasn’t given up yet.

Kelly Theriot said: “I would say this year I have more people buying cash than I ever had and they’re borrowing from their parents. They’re just looking for that cash because they know it’s more competitive with cash offers”. McMahon, a real estate agent with Compass in Dallas.

At an open house held last Sunday, she said buyers were training themselves for a bidding war.

“You’ve got to look at it to know that you’re likely going to have to bid like $40,000 off the asking price,” says Lauren Poey, a potential buyer who is touring the home.

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