Mortgage rates over 7% are throttling homebuyer demand

Mortgage demand slumps again as interest rates hover over 7%

Megan Henney / FOXBusiness

 

A key measure of home-purchase applications fell for the fifth week in a row as mortgage rates continued to hover above 7%, throttling demand among would-be buyers.

The Mortgage Bankers Association’s (MBA) index of mortgage applications fell 5.6% for the week ended Feb. 23, compared with a 10.6% drop the previous week, according to new data published Wednesday. 

The data also showed that the average rate on the popular 30-year loan decreased slightly to 7.04% last week. While that is down from a peak of 8% in October, it remains noticeably higher than the start of the year.

“Higher rates in recent weeks have stalled activity,” said Mike Fratantoni, MBA’s chief economist.

Housing demand has ground to a halt as rates move higher. Applications for a mortgage to purchase a home dropped 5% from the previous week. Application volume is down 12% compared with the same time last year. Read more and see video here.