Likewise, both refinance and purchase applications were also 8% and 3% lower than the previous week, respectively. Both percentages are significantly lower compared to the same time last year.
Joel Kan, associate vice president of economic and industry forecasting at MBA, said rapid inflation and tight monetary policies had pushed mortgage rates through the roof.
“The 30-year rate has increased 70 basis points over the past month and is two full percentage points higher than a year ago. The recent surge in mortgage rates has shut most borrowers out of term refinances, causing the refinance index to fall for the sixth consecutive week,” Kan said. “In a housing market facing affordability challenges and low inventory, higher rates are causing a pullback or delay in home purchase demand as well. Home purchase activity has been volatile in recent weeks and has yet to see the typical pick up for this time of the year.”
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Meanwhile, the refinance share of mortgage activity also decreased to 35.7% from 37.1% the previous week. Only the adjustable-rate mortgage (ARM) share increased to 8.5% of total applications – the highest level since 2019.