At 7.41%, 30-year fixed-rate mortgages have reached their highest level since 2000, resulting in a 27-year low in mortgage demand, CNBC reports. Total mortgage application volume fell by 1.3% last week compared with the previous week, and was down 25.5% year-over-year, according to the Mortgage Bankers Association.
Higher mortgage rates are affecting both prospective homebuyers and homeowners, resulting in fewer applications for refinancing and for home purchase loans.
“Based on the FOMC’s most recent projections, rates are expected to be higher for longer, which drove the increase in Treasury yields,” said Joel Kan, an MBA economist, referencing the Federal Open Market Committee. “Overall applications declined, as both prospective homebuyers and homeowners continue to feel the impact of these elevated rates.”