Mike Fratantoni reports mortgage demand has plummeted as rates hit a year-long high
Mortgage demand has significantly weakened as interest rates reached their highest levels in over a year. According to the Mortgage Bankers Association, total mortgage application volume dropped 2.9% week-to-week, marking the first time volume was lower annually since April. Mike Fratantoni, the chief economist at the Mortgage Bankers Association, noted that higher rates have weakened overall demand for both refinance and purchase loans. While rates recently began to slide, the average 30-year fixed rate for purchase loans remains high, which is offsetting any savings buyers might achieve through price negotiations. However, market conditions are beginning to shift. A pullback in Iran-related war rhetoric and lower oil prices have provided some reassurance to lenders, allowing rates to begin a steady decline from their July peaks. Current data shows the 30-year fixed rate for purchase loans at 6.62% and refinance loans at 6.59%. Experts suggest that while rates are currently high, the bond market's stability and upcoming jobs reports will determine the next direction of the market.