Home loan application volume hits 27-year low.
Mortgage applications fell over the past two weeks ago to the lowest level since 1996, according to the Mortgage Bankers Association’s holiday-adjusted report.
The market composite index – a measure of mortgage loan application volume – declined 13.2%, while the unadjusted index was down 13.2% from two weeks earlier.
MBA deputy chief economist Joel Kan said that the end of the year is typically a slower time for the housing market. Kan also pointed to high mortgage rates and the threat of a looming recession as the other main factors contributing to the decline.
Refinance applications decreased by 16.3%, and purchase mortgage applications decreased by 12.2% when adjusted for the holidays. Compared to a year ago, refinance apps were down by 87%, and purchase applications were 42% lower.
“Purchase applications have been impacted by slowing home sales in both the new and existing segments of the market,” Kan said. “Even as home-price growth slows in many parts of the country, elevated mortgage rates continue to put a strain on affordability and are keeping prospective homebuyers out of the market.
“Refinance applications remain less than a third of the market and were 87% lower than a year ago as rates remained close to double what they were in 2021. Mortgage rates are lower than October 2022 highs but would have to decline substantially to generate additional refinance activity.”
MBA noted that while the index changes were calculated relative to two weeks prior, the following compositional and rate measures are presented relative to the previous week only.