The average rate on a 30-year, fixed mortgage surpassed 7% on Tuesday, sending mortgage applications to purchase a home down 4% for the week and 30% lower than the same week one year ago, CNBC reports. Rates are rising due to uncertainty about the Federal Reserve’s plan to tame inflation in a strong economy, as well as an ongoing battle over raising the debt ceiling and the possibility of a U.S. default.
Applications to refinance a home loan also dropped 5% from the previous week and were 44% lower than the same week one year ago, the lowest level in two months.
“Since rates have been so volatile and for-sale inventory still scarce, we have yet to see sustained growth in purchase applications,” said Joel Kan, vice president and deputy chief economist at MBA.
Even if the debt crisis is resolved before a default, rates don’t have a lot of reason to move significantly lower anytime soon.
Advertisement
Related Stories
Housing Markets
Metros Where Housing Prices Have Doubled in Less Than 10 Years
Historical data show it's taken less than 10 years for home prices to double in 68 of the country’s 100 largest cities
Housing Policy + Finance
Even With Inflation Running Hot and Elevated Mortgage Rates, Buyer Demand Rises
Mortgage rates will likely stay high for the next few months, but that doesn't seem to be deterring homebuyers
Financing
Q1 2024 Foreclosure Activity Rises Slightly
Data show New York, Houston, and Chicago topping the list of major metros with the greatest number of foreclosure starts during Q1 2024