Mortgage-Application Index Falls to Lowest Level in 22 Years

Abstract

A measure of mortgage applications fell to its lowest level in 22 years last week, another sign the U.S. housing market is coming back to Earth after a red-hot, two-year stretch. Applications fell 6.5% in the week ended June 3, the fourth consecutive week of declines, according to the Mortgage Bankers Association. Sales of existing homes in April fell to their slowest pace since before the pandemic. Even with sales slowing, home prices continue to rise thanks to a dearth of homes for sale. "The purchase market has suffered from persistently low housing inventory and the jump in mortgage rates over the past two months," said Joel Kan, associate vice president of economic and industry forecasting at the Mortgage Bankers Association. Home prices are up about 40% since the pandemic started, according to the National Association of Realtors. A median American household needed 38.6% of its income to cover payments on a median-priced home in March, according to the Federal Reserve Bank of Atlanta.