Home loan, anyone?
Mortgages are selling like ice cubes in Antarctica, and the numbers seem to get worse every week.
Applications for home loans fell another 2 percent last week to their lowest level since 2000, according to the Mortgage Bankers Association.
“Home purchase applications continued to be held down by rapidly drying up demand, as high mortgage rates, challenging affordability, and a gloomier outlook of the economy kept buyers on the sidelines,” said the MBA’s Joel Kan in a statement.
Rates are not actually high by historical standards; the average 30-year, fixed-rate loan was 5.47 percent Tuesday, according to BankRate. But that is a lot higher than below 3 percent, where they spent most of last year.
The increase, prompted by Federal Reserve actions to arrest inflation, has sidelined some buyers and virtually shut down refinancing. Residential refi activity also fell to a low not seen since 2000, the Mortgage Bankers Association reported.
The trade group’s refinance index, a measure of refi activity, dropped 5 percent last week and is down 82 percent in 12 months. Homeowners paying 3 percent or 4 percent on their mortgages are not inclined to accept a higher rate unless they are desperate for a cash-out loan.
And purchase loans are down not only for the reasons Kan cited, but because precious few homes are for sale. Some would-be sellers are not listing their homes because they dread the prospect of buying one in this market, while others don’t because in the work-from-home era they can switch jobs without having to uproot their families.