Mortgage applications to purchase a home dropped 4% for the week and were down 18% year-over-year as affordability concerns mount as a result of rising inflation, CNBC reports. As homebuyer activity slows, the Fed’s aggressive rate hikes seem to have been put on pause, albeit temporarily, experts say. The average contract interest rate for 30-year fixed mortgages with conforming loan balances ($647,200 or less) remained stagnant at 5.74%, but high home prices still aren’t falling in most regional markets.
Applications to refinance a home loan rose just 2% for the week but were 80% lower year-over-year, and as rates continue to climb higher, fewer borrowers will benefit from a refinance.
“Purchase applications for both conventional and government loans continue to be weaker due to the combination of much higher mortgage rates and the worsening economic outlook,” said Joel Kan, an MBA economist. “After reaching a record $460,000 in March 2022, the average purchase loan size was $415,000 last week, pulled lower by the potential moderation of home-price growth and weaker purchase activity at the upper end of the market.”