As mortgage rates rose to a two-decade high last week, mortgage demand from homebuyers fell to its lowest level in 28 years, CNBC reports. Applications for a mortgage to purchase a home dropped 5% for the week and were 30% lower than the same week one year ago, while applications to refinance a home loan decreased 3% for the week and fell 35% on a year-over-year basis.
Meanwhile, the share of adjustable-rate mortgage (ARM) applications rose to 7.6%, the highest level in five months. The share of ARM applications rose 4% week-to-week.
“Treasury yields continued to spike last week as markets grappled with illiquidity and concerns that the resilient economy will keep inflation stubbornly high,” said Joel Kan, an MBA economist, in a release.
Buyer demand stood at the lowest level since December 1995. Potential buyers are dealing not only with high interest rates and high prices, but extremely low supply. The available homes on the market at the end of July were close to a quarter-century low, according to the National Association of Realtors.
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