Rising interest rates and a dwindling housing supply are pushing mortgage applications to their lowest level in 22 years. Total filings fell 6.5% last week, according to the Mortgage Bankers Association. Refinancing demand, the most sensitive to rate changes, is now 75% lower than a year ago. Climbing costs against a backdrop of rapid inflation have combined with low inventory to hit prospective first-time buyers hardest, said an MBA economist.
As they say, a lower interest rate doesn't make debt go away, but right now, that would be a good problem to have for some. Rising interest rates are beginning to have a big time impact on mortgage demand, which has now fallen to the lowest level in 22 years. That's having an effect on home sales and refinancing. While that's all happening, affordability is only getting worse when you combine that with low housing inventory. That last point is important. You'd expect declining demand to pull prices down, but prices will continue to rise throughout the year. How much? If you believe the estimates, the low supply will likely drive prices up another 15% this year. And when those prices will start coming down, nobody knows https://cnb.cx/3aGqZPi #realestate #mortgage #interestrates #homebuying #economics
Kerry Ryan评论了
A very basic pre algebra equation predicted this would happen (if you’ve been following my rhetoric for any amount of time now this headline should come as no surprise). Next up - home values soften as demand drops and people who want liquidity are willing to take less. Math for the win.
Katie Bridge评论了
A very basic pre algebra equation predicted this would happen (if you’ve been following my rhetoric for any amount of time now this headline should come as no surprise). Next up - home values soften as demand drops and people who want liquidity are willing to take less. Math for the win.
Fingers crossed for prices to actually drop! You think build prices will drop, too?
Formerly CNBC, WSJ. I am a freelance writer, editor and director of content who can help you tell interesting stories, grow your audience and manage communications.
In the latest sign that the housing market is starting to cool, mortgage demand fell to its lowest level in 22 years. Two things are at play here: Rising mortgage rates (the average rate on a 30-year mortgage is now 5.4%) and low housing inventory. Some people just really got sidelined by the soaring prices (home prices jumped more than 20% in one year!). I know I’ve had several people tell me they’d like to buy a house but can’t afford to get into a bidding war. In my neighborhood in New Jersey, for example, houses were often going for $100,000 over asking – and they were already at all-time highs! And, of course, housing was just one part of the inflation puzzle. Families are getting crunched on everything from gas to grocery prices. My hairdresser just told me the other day that salon prices are going up b/c of the hit they took during the pandemic. Friday brings a key inflation reading -- consumer prices for May. It will likely still be above 8% year over year but hopefully it will show that inflation has peaked and we’re headed to more normalcy from here. Read more >> https://cnb.cx/3H3sao0
Well into summer you will know we have finally gotten around to the rest of the Everything Bubble, we will be hit hard on crypto, housing, even new and used cars will be far cheaper. What went up - EVERYTHING - must come down. But it will be a dire situation because the bill for feeding that asset inflation, excessive debt, must be dispositioned in some shape, manner or form, every dollar of debt disposition will mean a dollar of cost depending upon the nature of disposition. Cancelation, bankruptcy, forgiveness, inflation, monetization, asset seizures, conversion to equity, restructure, pay in part or pay in whole, every single dollar dealt for debt in this direction means a dollar less for productive economic growth and vibrancy. #thegreatreckoning KEY POINTS The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 5.40% from 5.33%. Applications for a mortgage to purchase a home fell 7% for the week and were 21% lower than the same week one year ago. Refinance demand dropped 6% for the week and was down 75% year over year.
Chaos Wrangler & Future Proofer ~ Navigating, Accelerating, Validating Innovation & Technological Adoption.
It was 2006 and 5.75% rate mortgage was a really good rate. I had refinanced an executive from PP&G out of a 7.25%. He was excited because he hadn't see rates that low in a long, long time. He told me stories of early 1980s when he first bought a home. 10.75% My mortgage was 3.25%, in 2014. Now, people think this is "expensive?" Oh how people don't know or make time time to know History. The "10% rule" is here now, and it looks and feels a lot like 2008 (seizing of capital, not a bust this time) - Sure, home inventory is drastically low, pushing up cash sales drastically. - A new home is about to touch $400,000 putting more than half the USA out of touch with homeownership. - Existing homes don't list as the "upward mobility" is tapped out too i.e. no where to move and if do it's less land, more bunched up, & sometimes less square feet ! So, what is the "10%" rule?" - 5% mortgages rates + $5/fuel Guess what, the USA has arrived. Every 1% higher it goes, the more probability in a recession or about to experience it, fast & hard. Buckle up buttercup ! #business #economy #markets https://lnkd.in/gncq2Q9V
A very basic pre algebra equation predicted this would happen (if you’ve been following my rhetoric for any amount of time now this headline should come as no surprise). Next up - home values soften as demand drops and people who want liquidity are willing to take less. Math for the win.
Private Banker - at U.S. Bank Private Wealth Management
As Richard Nixon's chief economist Herb Stein used to say, "If something can't go on forever, it won't." Home payments couldn't continue to outpace wage growth forever.