The demand for mortgages, both to purchase and refinance, declined for the second consecutive week and sank to the lowest level since before the coronavirus pandemic started in early 2020.
Applications overall decreased 1.8% last week while applications to refinance dropped 2% compared with the previous week and were off 8% from the comparable year ago period, according to the Mortgage Bankers Association. Refinance demand has trended lower than 2020 levels for the past four months.
“Swift home-price growth across much of the country, driven by insufficient housing supply, is weighing on the purchase market and is pushing average loan amounts higher,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting.
Falling mortgage rates didn’t spur demand. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) dropped 5 basis points to 3.15, with points decreasing to 0.38 from 0.39 (including the origination fee) for loans with a 20% down payment.
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