Business is booming.

Mortgage applications hit 22-year low

MBA’s refinance and purchase indices – seasonally adjusted – posted week-over-week declines of 4% and 7%, respectively. Consequently, the refinance share of mortgage activity grew six basis points to 31.4% of total applications. The adjustable-rate mortgage (ARM) share of activity decreased to 9.5% of total applications.

Read more: Refinance applications see double-digit increase

“Purchase activity declined for both conventional and government loans, as the weakening economic outlook, high inflation, and persistent affordability challenges are impacting buyer demand,” Kan said. “The decline in recent purchase applications aligns with slower homebuilding activity due to reduced buyer traffic and ongoing building material shortages and higher costs.”

The dynamics of soaring mortgage rates and house price growth will continue to slow down activity in the single-family purchase market, Freddie Mac said in its new quarterly forecast. The 30-year fixed mortgage rate is expected to average 5% this year and 5.1% in 2023. That is compared to its 3% average in 2021.

Meanwhile, home price appreciation will likely remain high in 2022, averaging 12.8% before slowing to 4% in 2023. House price growth was 17.8% in 2021.

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