Mortgage application volume has fallen to its lowest level in 28 years as mortgage rates ticked up again in response to new signs that inflation remains stubbornly persistent.
Rising rates means fewer prospective buyers, which is a troubling sign, especially as the spring housing market is supposed to be heating up.
According to the Mortgage Bankers Association’s seasonally adjusted index, mortgage applications to purchase a home dropped 6% last week, compared with the previous week. Volume was 44% lower than the same week one year ago, and is now sitting at a 28-year low.
For the week that ended February 24, the average contract rate on a 30-year fixed mortgage increased to 6.71%, from 6.62% the week prior. This is the highest average rate since November of last year.
Mortgage demand from homebuyers would seem to indicate a very slow spring ahead.
Related: First-Time Homebuyers, Here’s a Primer on Mortgage Rates
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