US Mortgage Application Volume Hits Lowest Level in 22 Years

[Asia Economy New York=Special Correspondent Joselgina] As U.S. mortgage rates rise, mortgage application demand last week fell to the lowest level in 22 years. Amid the full-scale interest rate hike and growing concerns over economic slowdown, the housing market bubble is said to be deflating.

According to the Mortgage Bankers Association (MBA) on the 8th (local time), the number of mortgage applications for home purchases during the week ending on the 3rd decreased by 6.5% compared to the previous week. This marks the fourth consecutive week of decline. In terms of volume, it is the lowest level in 22 years.

Refinance applications for mortgage loans also dropped by 6% compared to the previous week. Purchase activity also decreased by 7%.

The primary reason for the decline in mortgage demand is the recent rise in interest rates. According to Freddie Mac, the 30-year fixed-rate mortgage rate jumped from the 3% range at the beginning of the year to the 5% range last week. The situation where housing market supply cannot keep up with demand also contributed to the decrease in mortgage applications.

The Wall Street Journal (WSJ) reported, "Even though sales are slowing, home prices continue to rise due to housing shortages," adding, "This means potential buyers are struggling with two issues: double-digit surges in home prices and high borrowing costs."

According to the National Association of Realtors (NAR), U.S. home prices have surged about 40% since the pandemic.

This content was produced with the assistance of AI translation services.