December 6, 2023

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Home purchase orders in the United States fall to their lowest levels…

Home purchase orders in the United States fall to their lowest levels…

Bloomberg – A measure of mortgage applications for home purchases in the United States was released last week. Recording its lowest level in 28 years, which highlights the stifling effect of high interest rates Mortgage in relation to consumer demand.

According to data published Wednesday, the Mortgage Bankers Association’s Home Purchase Applications Index fell 2.1% to 141.9, the lowest level since April 1995. The US 30-year mortgage interest rate fell 10 basis points to 7.21%.In the week ending September 1, though, it remains near its highest level in decades.

Considering the Weaken refinancingThe overall mortgage demand index fell by 2.9%, reaching its lowest level in 27 years.

High mortgage rates have put homeownership out of reach for many citizens and pushed housing affordability to its worst levels in decades. On the other hand, borrowers benefiting from low pandemic-era mortgage interest rates are reluctant to abandon them, which limits inventory and puts upward pressure on home prices, making the problem worse.

Newly built homes have filled some of the supply gap, but it’s hard to see sustainable relief for potential homeowners until borrowing costs come down. But even then, the resulting demand rebound threatens to push prices even higher.

However, the Fed It does not look like he will lower interest rates anytime soon. Officials noted not only that borrowing costs may need to increase, but also that interest rates would need to remain high to control inflation.

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The survey, which has been conducted weekly since 1990, uses responses from mortgage bankers, commercial banks and savings funds. the The data covers more than 75% of all requests of retail residential mortgages in the United States