Read more: Mortgage applications enter fourth straight month of decline
According to the Mortgage Bankers Association, mortgage application volume has plunged to its lowest level in 25 years, with refinance and purchase applications down 7% and 4%, respectively.
“The speed and level to which rates have climbed this year have greatly reduced refinance activity and exacerbated existing affordability challenges in the purchase market,” said MBA deputy chief economist Joel Kan. “Residential housing activity ranging from new housing starts to home sales have been on downward trends coinciding with the rise in rates.”
“Homebuilder confidence has dropped to half what it was just six months ago, and construction, particularly single-family residential construction, continues to slow down,” Khater added.
US housing starts declined 8.1% to a seasonally adjusted rate of 1.44 million in September as rising interest rates continue to exacerbate existing affordability issues. Single-family starts fell 4.7% to an annualized rate of 892,000 in September, while multifamily starts were at a 530,000 pace.
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