Per Bloomberg
Fewer Americans are applying for mortgages for the fourth week in a row as its levels reach the second-lowest since 1995. This came despite a recent 10 basis point decrease in 30-year-fixed mortgages.
As seen on the Mortage Bankers Association index, it was revealed that there was a 1.7% drop in home purchase mortgage applications in the week that ended June 2. This came despite a 10 basis point decrease to 6.81%.
Despite the drop in 30-year-fixed mortgage, the five-year adjustable-rate mortgage saw a surge, reaching close to 6% levels. Per MBA data, this was the highest point since 2011 after the five-year adjustable-rate mortgage increased by 54 basis points.
The five-year adjustable mortgage rate reached 5.93%. MBA deputy chief economist Joel Kan gave a statement regarding the situation.
Kan: “Purchase activity is constrained by reduced purchasing power from higher rates and the ongoing lack of for-sale inventory in the market, while there continues to be very little rate incentive for refinance borrowers,”
Capital Economics property economist Sam Hall also commented on the affordability of the situation and what they expect to happen in the next months.
Hall: “Affordability still looks badly stretched by past standards, which will continue to weigh on mortgage demand in the coming months... Buyers will also face headwinds from a weakening economy, so we doubt demand will rise far from its current level over the rest of this year.”
The Mortgage Bankers Association data recently revealed that new home buyers are facing the most unaffordable market ever. This comes as 30-year fixed mortgages reached over 7% from just around 3%, representing an over-double increase.
Housing reaches four-decade-high unaffordable levels. This resulted in first-time buyers needing to earn as much as $90,000 in 2022.
See flow at unusualwhales.com/flow.
Other News:
- Mortgage Bankers Association data shows how new home buyers are facing the most unaffordable market ever
- Housing is now at almost four-decade-high unaffordable levels, with first-time buyers needing to earn as much as $90,000 in 2022
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