The housing market has seen a drop in demand last week due to consumer demand reducing in the face of higher mortgage rates.
The Mortgage Bankers Association's index fell 4.6% last week, to the lowest level since February.
Mortgage applications declined nearly five percent last week because borrowers remained sensitive to higher rates, said Joel Kan, MBA's deputy chief economist. Since rates have been so volatile and for-sale inventory still scarce, we have yet to see sustained growth in purchase applications. The housing market has cooled quickly as a result of the aggressive tightening campaign.
Politicians have already lifted the benchmark federal funds rate 10 consecutive times and have opened the door to another increase at their June meeting, following a slew of stronger-than-expected economic data.
For months, rising mortgage rates have dampened consumer demand and brought down consumer demand, as rates have slowly fallen from a peak of 7%.
However, the return to lower mortgage rates has not been seamless. The number rose significantly to start the week, according to a separate MBA survey, with rates surging to 6.91%.
The rise came before the White House and Republicans reached a deal to lift the federal debt ceiling and avoid a first-ever default. The legislation has faced resistance from both sides of the aisle, and Congress still needs to pass it.
The dollar has also boosted demand and prices this month, boosting demand and prices.
The number of homes on the market in March was down more than 50% from the average amount before the pandemic began, according to a report from Realtor.com.