{"id":2182792,"date":"2024-02-21T11:06:01","date_gmt":"2024-02-21T16:06:01","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/mortgage-demand-tanks-as-mortgage-rates-rise-past-7-again\/"},"modified":"2024-02-21T11:10:57","modified_gmt":"2024-02-21T16:10:57","slug":"mortgage-demand-tanks-as-mortgage-rates-rise-past-7-again","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/mortgage-demand-tanks-as-mortgage-rates-rise-past-7-again\/","title":{"rendered":"Mortgage demand plummets as rates surpass 7% once more"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"float:left\"><div class=\"counts mashsbcount\">18<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fmortgage-demand-tanks-as-mortgage-rates-rise-past-7-again%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2182792&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><h2>Mortgage Demand Plummets as\u2064 Homebuyers Retreat from Housing Market<\/h2>\n<p>The housing market is\u2062 experiencing a significant decline in mortgage demand as\u200c homebuyers become hesitant due to rising mortgage rates. According to a report from the Mortgage Bankers Association, <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/mortgage-demand-hits-lowest-level-in-nearly-three-decades\/\" title=\"Mortgage demand at its lowest in almost 30 years.\">mortgage loan application volume dropped<\/a> by 10.6% last week compared to the previous week. Refinances also saw a sharp decline of 11% during the same period.<\/p>\n<p>This decrease in demand coincides with the recent\u2064 surge in mortgage rates. As of Wednesday, the \u200caverage rate on a <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/housing-starts-rose-in-december-as-mortgage-rates-remained-elevated\/\" title=\"Housing starts increased in December despite high mortgage rates\">30-year \u2062fixed-rate mortgage<\/a> has skyrocketed to 7.11%, a significant increase from the \u2064recent low of 6.65% in \u200cDecember.<\/p>\n<p>Mike Fratantoni, MBA&#8217;s senior vice president and chief economist,\u200c explains, &#8220;Mortgage applications dropped, particularly in refinance applications. \u200cPotential homebuyers are highly sensitive to these rate changes, as \u200baffordability becomes strained \u200cwith higher rates and home values in this supply-constrained market.&#8221;<\/p>\n<p>The housing market has been in a state of flux since the\u2062 Federal Reserve began raising interest rates nearly two\u2064 years ago. Mortgage rates are now at \u2063their highest point since \u200bbefore the Great Recession, reaching levels not seen in\u2063 decades.<\/p>\n<p>Although \u200cmortgage rates had been falling due to expectations of rate cuts by the Fed, recent inflation \u2062reports and economic indicators\u200b have reversed this trend. The strong\u200d economy and sticky inflation \u2062have increased \u2063the likelihood of the central bank maintaining higher rates for a longer period.<\/p>\n<p>Historically, when mortgage rates rise, demand for homebuying \u2063tends to decline. Additionally, the pandemic has created a unique dynamic, with interest rates dropping to near zero and mortgage rates hitting historic lows\u200d below \u200b3%. This led to a surge in\u200d home purchases and refinances. However, as \u200bmortgage rates quickly \u200crose, homeowners who locked\u2063 in those sub-3% rates \u2062have been\u200b hesitant to sell, resulting in \u2064a scarcity of existing homes on the\u2064 market and putting pressure on \u200dthe \u2062new homes market.<\/p>\n<p>In December, existing home\u2063 sales reached their lowest level in over a decade, with a\u2064 1% decline to a <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/report-home-prices-are-up-nearly-25-since-this-time-last-year\/\" title=\"Report: Home Prices Are Up Nearly 25% Since This Time Last Year\">seasonally adjusted annual rate<\/a> of 3.78 million. On the other\u200b hand,\u200d new home sales rose by 8% from November to December, indicating that the lack of supply in previously \u200cowned homes is driving buyers towards newly built units.<\/p>\n<p>Overall, the current state of the housing market reflects the\u2064 impact of rising mortgage rates on homebuyers&#8217; \u2063behavior\u2063 and the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/gavin-newsom-implies-inflation-pains-are-a-conservative-lie\/\" title=\"Newsom suggests conservative lie about inflation pains\">ongoing\u2062 challenges posed<\/a> by limited supply.<\/p>\n<p><strong>Click \u2063here to read more from The Washington Examiner.<\/strong><\/p>\n<p> <\/p>\n<h2> Are there any experts who believe that the decline in\u2064 demand\u200d could\u200c have positive effects \u2062on \u200bthe housing market in the long \u2062run? If so,\u200c what\u200b are their arguments<\/h2>\n<p><span>  Ello, chief economist at the Mortgage Bankers Association, attributes this decline in demand to the increase in mortgage rates.\u2062 He explains that &#8220;as rates go \u200dup, affordability\u200c goes down, and \u200bthat affects both existing homeowners looking to refinance and potential homebuyers.&#8221;<\/p>\n<p>The increase in mortgage rates can be attributed to several factors. The \u2062recent \u2064rise in \u200binflation, driven by\u2062 rising energy and commodity\u200b prices, has led to expectations of <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/brent-oil-hovers-over-80-as-inflation-worries-ease\/\" title=\"Brent oil stays above  as inflation concerns ease.\">higher \u2064interest rates<\/a> \u2062by the Federal Reserve. This anticipation of future rate hikes has caused mortgage lenders\u2064 to raise their rates as well. Additionally, the increasing demand for \u200chousing coupled \u2064with limited supply has \u2062also put \u200cupward pressure on \u2063prices, leading to higher\u200c mortgage \u2064rates.<\/p>\n<p>The decrease in mortgage demand has significant implications for the overall housing market. With\u200b fewer homebuyers entering the\u200d market, \u200dthere is a risk of slowing down the\u200d sales activity. This \u200ccould lead \u200bto a decrease in \u2064property prices, causing homeowners to lose equity. In turn, this \u200dcould have a\u200b negative impact on consumer spending and the overall \u200deconomy.<\/p>\n<p>However, \u200cnot all experts are concerned about the\u200c decline in demand. Some \u2063argue that the housing market has been overheated for some time, and \u2063a slowdown may actually be beneficial \u2064in the \u2062long run. They believe that the current decline in\u2064 demand will help balance the market and prevent a bubble from forming.<\/p>\n<p>Nevertheless, for those who were\u200b eagerly waiting to buy a home, these rising mortgage\u200b rates have made\u2064 homeownership less affordable.\u2063 Potential buyers are now facing higher\u200b monthly payments, which\u200d may force some\u200d to delay their \u2062home purchase or \u2063even step out of\u200c the market altogether.<\/p>\n<p>In conclusion, the housing market \u2064is currently experiencing a significant decrease in mortgage\u2063 demand as homebuyers become \u2063hesitant due to the rise in mortgage\u2062 rates. This decline in demand has been reflected in\u200d a drop in mortgage loan application \u2064volume \u2064and refinances. \u200cThe increase in mortgage rates can be attributed to factors such \u2063as\u2063 rising \u2062inflation and\u200b limited housing\u2063 supply. While some experts believe that a slowdown in the market \u200dcould be beneficial in the long run, the current situation presents\u200c challenges\u200d for potential homebuyers\u2063 looking to enter the\u200b housing market. It remains \u2063to\u200b be seen how the market\u2063 will adjust to these \u200dchanges and what impact it \u200bwill have on the overall economy.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Mortgage demand dropped significantly last week due to higher mortgage rates, causing homebuyers to hesitate. According to the Mortgage Bankers Association, mortgage loan applications decreased by 10.6% on a seasonally adjusted basis compared to the previous week. Refinancing volume also plummeted by 11%<\/p>\n","protected":false},"author":2683,"featured_media":2182793,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/wex-s3.s3.us-east-1.amazonaws.com\/wp-content\/uploads\/2023\/12\/ap-19084632314990.jpg","fifu_image_alt":"","footnotes":""},"categories":[538],"tags":[],"class_list":["post-2182792","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-washington-examiner"],"fifu_image_url":"https:\/\/wex-s3.s3.us-east-1.amazonaws.com\/wp-content\/uploads\/2023\/12\/ap-19084632314990.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2182792","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/2683"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2182792"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2182792\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2182793"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2182792"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2182792"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2182792"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}