Mortgage application volume dropped 13.2% at the end of last week from two weeks prior as the average contract interest rate for 30-year fixed-rate mortgages with conforming balances of $647,200 or less rose from 6.34% to 6.58%, according to the Mortgage Bankers Association’s seasonally adjusted index.
Refinancing demand dropped 16.3% from two weeks earlier and was down 87% from the same period in 2021, while mortgage applications to purchase a home ended the year at their lowest level since 1996, CNBC reports.
“Mortgage rates are lower than October 2022 highs, but would have to decline substantially to generate additional refinance activity,” noted Joel Kan, an MBA economist.
“Purchase applications have been impacted by slowing home sales in both the new and existing segments of the market. Even as home-price growth slows in many parts of the country, elevated mortgage rates continue to put a strain on affordability and are keeping prospective homebuyers out of the market,” said Kan, who also pointed to the threat of a wider economic recession.