Mortgage applications fell last week as rising prices and rising mortgage rates made mortgage payments harder for the average American, according to data from the Mortgage Bankers Association.
Total mortgage applications for the week ending Feb. 16 fell a seasonally adjusted 10.6% week over week, while the purchase index fell 10% over the same period. according to Until the release from MBA. The decline in applications comes as the average interest rate on 30-year fixed-rate mortgages for homes under $766,550 rose to 7.06% from 6.87% the previous week, worsening housing affordability. . (Related article: 'A serious problem': The plague of global recession could also affect the US, experts say)
“Mortgage rates rose more than 7% last week on news that inflation accelerated in January, dampening hopes for short-term rate cuts,” MBA chief economist Mike Fratantoni said in a statement. said. “As a result, mortgage applications fell with a significant drop in refinance applications. In this supply-constrained market, both rising interest rates and rising home values are putting pressure on affordability, so there is potential for homebuyers are becoming very sensitive to these changes in interest rates.”
🇺🇸 Mortgage interest rates exceed 7% for the first time since December
Average interest rate on new 30-year fixed-rate mortgages in the U.S. rises to 7.06% from 6.87% last week – MBA (via Bloomberg) pic.twitter.com/qoDcLLiymb
— Evan (@StockMKTNewz) February 21, 2024
According to the MBA, the number of people refinancing their homes fell by 11%, and the share of mortgage refinance applications in total applications fell to 32.6%. Interest rates on mortgages over $766,550 rose to 7.16% from 7.00% the previous week.
The 30-year mortgage rate reached a recent high of 7.79% in October, after rising rapidly from just 2.65% at the beginning of 2021. Existing home sales in December fell to their lowest level since 1995, down 6.2% from a year earlier. Year.
Mortgage rates are facing upward pressure from increases in the federal funds rate, with the Federal Reserve currently setting interest rates in a range of 5.25% to 5.50%, the highest level in 23 years. There is. This rate is set in a very high range to control inflation, which peaked at 9.1% in June 2022 under President Joe Biden and most recently reached 3.1% in January. .
Rent insolvency has also reached an all-time high, with 22.4 million households now spending more than 30% of their income on rent and utilities, an increase of 2 million from three years ago.The cost of the shelter is woke up Since January 2021, when Biden was first inaugurated as president, it has been 19.5%.
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