“Purchase demand continues to tumble as the cumulative impact of higher rates, elevated home prices, increased recession risk, and declining consumer confidence take a toll on homebuyers,” Freddie Mac chief economist Sam Khater noted.
According to the Mortgage Bankers Association, overall home loan applications dropped 1.8% for the week ending July 22. MBA registered a 4% decrease in its refinance index and a 1% decrease in its purchase index.
“Mortgage applications declined for the fourth consecutive week to the lowest level of activity since February 2000,” said Joel Kan, AVP of economic and industry forecasting at MBA. “Increased economic uncertainty and prevalent affordability challenges are dissuading households from entering the market, leading to declining purchase activity that is close to lows last seen at the onset of the pandemic.”
Kan added that weakening purchase demand trends in recent months have been consistent with data showing a slowdown in sales for newly constructed homes and existing homes, which were down 8.1% and 5.4% month over month in June, respectively.
Read more: New home sales drop to two-year low