Mortgage demand falls to the lowest level since the end of 2018, even as interest rates ease a bit

Abstract

Mortgage demand slipped to the lowest level since December 2018, even after rates declined slightly last week. Applications for a mortgage to purchase a home fell 1% last week compared with the previous week, according to the Mortgage Bankers Association's seasonally adjusted index. "Mortgage rates fell for the fourth time in five weeks, as concerns of weaker economic growth and the recent stock market sell-off drove Treasury yields lower," said Joel Kan, an MBA economist. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances decreased to 4.93% from 5.02%. Jumbo loans are mostly held in investor and bank portfolios, as opposed to being sold to Fannie Mae or Freddie Mac. Applications to refinance a home loan, which are more sensitive to rate moves than purchase applications, fell 5% for the week and were 75% lower than the same week one year ago. Even as rates moved off their highs over the past few weeks, refinance demand hasn't come back because so many borrowers already went through the process when rates were sitting at record lows last year. Mortgage rates began this week higher, according to a read from Mortgage News Daily, due to volatility in global markets "High inflation in Europe and and the easing of Covid-related lockdowns in China both took a toll on bonds," wrote Matthew Graham, COO of Mortgage News Daily.