Mortgage Applications Dropped To Lowest Level Since Pandemic

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With the housing market still experiencing low inventories and high demand, mortgage applications are falling for the second week in a row. According to the Mortgage Bankers Association (MBA) seasonally adjusted index, mortgage applications fell 1.8% last week, the lowest level since early 2020, CNBC reported.

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The fall in mortgage rates did not lead to an increase in demand. Refinancing applications fell 2% over the week, down 8% from a year earlier. Refinancing applications have fallen below 2020 levels in the past four months, according to the MBA and CNBC. The number of applications for the purchase of housing for the week fell by 1%, which is 14% less than a year ago.

The average 30-year fixed rate mortgage with a corresponding loan balance of $ 548,250 or less fell 5 basis points to 3.15, down a point to 0.38 from 0.39 (including issuance fees) for loans with a 20% down payment, notes CNBC.

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The MBA data also showed that the share of mortgage refinancing activities fell to 61.6% of the total number of applications, up from 61.9% in the previous week. The share of adjustable rate mortgage (ARM) loans fell to 3.3% of total applications.

“The rapid rise in home prices across much of the country, driven by undersupply, is putting pressure on the buying market and leading to an increase in the average loan amount,” said Joel Kahn, MBA’s deputy vice president of economic and industry forecasting.

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