The Market Composite Index, a measure of mortgage loan application volume, fell 2.3% to 273.3 during the week ending August 12 as elevated mortgage rates and recession fears cause a growing number of homebuyers to delay their purchasing plans. The 30-year fixed-rate mortgage averaged 5.45% for the week ending August 12, down slightly from 5.47% the week before, but still well above pre-pandemic rates, Realtor.com reports.
The Purchase Index dropped 1% from the previous week, while the Refinance Index fell by 5% and was down 82% year-over-year, pushing mortgage application activity to its lowest level since 2000.
Mortgage application activity has dropped to the “lowest level since 2000,” Joel Kan, associate vice president of economic and industry forecasting at MBA, said in a statement.
The fall in purchase apps falling is due to demand “rapidly drying up,” higher mortgage rates, and fears of a recession, Kan added.
Some buyers have become more non-committal, backing out of deals when they see any potential issues with their home, one brokerage said. Previously, the same homes would have been subject to bidding wars.
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
