Generated

Mike Fratantoni reports mortgage demand continues to drop as rates hit a one-year high

Mortgage demand has continued to decline as interest rates reached their highest levels in over a year. According to the Mortgage Bankers Association, total mortgage application volume fell 2.9% week-to-week, marking the first time volume was lower annually since April. Mike Fratantoni, chief economist at the Mortgage Bankers Association, noted that higher rates have weakened overall demand for both purchase and refinance loans. While the average 30-year fixed-rate mortgage rose to 6.66% according to Freddie Mac, the Mortgage Bankers Association reported an increase to 6.81% for conforming loans. These elevated costs are offsetting any savings buyers might achieve through higher market supply. Meanwhile, the Federal Reserve left its key interest rate unchanged, though three officials dissented in favor of a hike. Market analysts suggest that geopolitical tensions and oil prices remain primary drivers of inflation, with a de-escalation in the Middle East conflict potentially offering a clear path toward lower rates.

Sources