According to a poll by the Mortgage Bankers Association (MBA), demand for mortgage loan applications dropped 5.7% in the last week of February, and the industry body pointed the blame squarely at increased interest rates.
“The 30-year fixed rate went up to 6.71 percent last week, which is the highest it has been since November 2022. This caused applications to fall by 6 percent.” In a press release, MBA’s vice president and deputy chief economist, Joel Kan, said, “After a brief rise in applications in January when mortgage rates dropped to 6.2%, they have gone down for three weeks in a row because mortgage rates have gone up 50 basis points in the last month.”
The trend is exerting downward pressure on both purchase and refinance applications, with the former down 44 percent from the previous year and the latter down 77 percent from the prior year.
Each measure reached a 28-year low for the second week in a row.
Kan added, ” Thenflation, employment, and economic activity indicators dictate that inflation may not be dropping as soon as expected, putting upward pressure on interest rates.”