Higher interest rates and very high home prices dragged down demand for mortgages for the third straight week, data from the Mortgage Bankers Association indicated Wednesday.
Mortgage applications fell 6.3 percent for the week ending July 15, 2022, the MBA said.
Applications for a mortgage to purchase a home dropped 7 percent for the week. Compare with a year ago, applications are down 19 percent.
Refinance loans, which are extremely sensitive to mortgage rates, continued to fall. The refinance index fell four percent from the previous week and is 80 percent lower than a year ago.
“Mortgage applications declined for the third week in a row, reaching the lowest level since 2000. Similarly, with most mortgage rates more than two percentage points higher than a year ago, demand for refinances continues to plummet, with MBA’s refinance index also falling to a 22-year low,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting.
The average interest rate for 30-year fixed-rate mortgages with conforming loan balances —$647,200 or less—increased to 5.82 percent from 5.74 percent a week ago. A year ago, the average rate was 3.10 percent. The average interest rate for 30-year fixed-rate mortgages with jumbo loan balances rose to 5.31 percent from 5.25 percent a week prior. A year earlier, the average rate was 3.13 percent.