The numbers: Mortgage demand plunged for the third week in a row as rates keep climbing.
Demand for mortgages fell 5.7% in the latest week as mortgage rates hover at highs last seen in November.
Demand for both purchases and refinancing both fell. That pushed the market composite index — a measure of mortgage application volume — down, the Mortgage Bankers Association (MBA) said on Wednesday.
The market index fell 5.7% to 188.5 for the week ending Feb. 24, from a week earlier. A year ago, the index stood at 463.1.
Key details: The refinance index fell 5.5% and was down 74% compared to a year ago.
The purchase index, which measures mortgage applications for the purchase of a home, fell by 5.6% from last week.
The purchase index is at a 28-year low for the second week in a row, the MBA said.
The average contract rate for 30-year mortgages on homes selling for $726,200 or less was 6.71% in the week ending Feb. 24.
The 30-year mortgage was last at this level in November 2022, up from 6.62% the week before, the MBA said.
For homes with a selling price of over $726,200, the average rate for the 30-year was 6.44%, unchanged from the previous week.
The 15-year rate rose to 6.13%, from last week’s 5.98%.
The rate for adjustable-rate mortgages rose to 5.73% from last week’s 5.66%.
The big picture: The rate-sensitive housing sector is back in a slump.
The industry is likely to report sales and home prices dropping in the coming weeks and months, as purchase applications give an early read of how home-buying activity is faring.
What are the MBA said: “Data on inflation, employment, and economic activity have signaled that inflation may not be cooling as quickly as anticipated, which continues to put upward pressure on rates.” Joel Kan, vice president and deputy chief economist at the MBA, said.
MarketWatch Economic Report Online | Aarthi Swaminathan | Updated March 1, 2023, 7:24 am EST
