Mortgage applications hit lowest level since 1997 as key rate rose to 7.14%

  • Mortgage applications have fallen to their lowest level since 1997, according to Mortgage Bankers Association data.
  • The 30-year fixed rate rose last week to 7.14%, near its highest since 2001.
  • The housing market is getting more and more out of hand amid the Federal Reserve’s hawkish policy line.

Mortgage applications have fallen to their lowest level in 25 years as borrowing costs continue to rise, according to data from the Home Loan Bankers Association released Wednesday.

MBA’s overall activity index fell 0.1% for the week ending November 4, to its lowest level since 1997. Refinancing demand fell 4% to his lowest level in 22 years.

At the same time, interest rates on the most popular mortgage product, the 30-year fixed mortgage, rose from 7.06% last week to 7.14%, near the highest level since 2001.

“Mortgage rates rose last week after news that the Federal Reserve would continue to raise short-term rates to combat high inflation. of loan types,” he said. MBA Deputy Chief Economist Joel Kang.

The housing market has been particularly sensitive to changes in Federal Reserve interest rates, and housing has gotten increasingly out of hand as policymakers launched a hawkish campaign this year.

By raising interest rates—that is, raising mortgage rates—the Fed aims to cool the economy by forcing Americans to tighten their belts.

On November 2nd, the Fed hiked rates by 75 basis points for the fourth time in a row, signaling that the pause will continue for some time.

As home prices rise, homebuyers are looking for cheaper financing options such as variable rate loans. Last week, five-year adjustable mortgage rates he rose to 5.87%, the highest since the data began in 2011.

activities in The US housing market has already adjustedComerica chief economist Bill Adams wrote in a note last month. doing.

Leave a Comment