This week the Mortgage Bankers Association (MBA) reported a 6.5% week-over-week drop in mortgage applications. This is the fourth straight week of declining applications and it brings the number of loan requests to its lowest rate since 2000.
According to Joel Kan, MBA’s associate VP of Economic and Industry Forecasting,
Weakness in both purchase and refinance applications pushed the market index down to its lowest level in 22 years. The 30-year fixed rate increased to 5.4 percent after three consecutive declines. While rates were still lower than they were four weeks ago, they remained high enough to still suppress refinance activity. Only government refinances saw a slight increase last week.
The purchase market has suffered from persistently low housing inventory and the jump in mortgage rates over the past two months. These worsening affordability challenges have been particularly hard on prospective first-time buyers.
The “persistently low housing inventory” mentioned by Kan has lead to home prices here in Massachusetts hitting record highs in April 2022. (See my post, MA Home Prices Hit Record High in April 2022.)