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Mortgage Applications Falls to Lowest Level in 22 Years


An Article by Realtor.com


The Wall Street Journal is reporting that mortgage applications fell to their lowest level in 22 years during the first week of June. They say this is another sign that the U.S. housing market is “coming back to Earth” after a red-hot, two-year stretch.


Citing data from the Mortgage Bankers Association, they say mortgage applications dropped 6.5% in the week ending June 3 (the 4th consecutive week of declines) along with refinance & purchase activity falling 6% and 7%, respectively. In addition they report that the Federal Reserve Bank of Atlanta says a median American household needed 38.6% of its income to cover payments on a median-priced home in March. That figure was up from 32.6% at the end of 2021 and at the highest level since August, 2007.

Higher interest rates have been weighing on demand for refinances all year, but now there are signs the slowdown has spread to purchase demand as well. Sales of existing homes in April fell to their slowest pace since before the pandemic. But even with sales slowing, home prices continue to rise thanks to a dearth of homes for sale. That means many would-be buyers are struggling with the twin challenges of double-digit jumps in home prices and higher borrowing costs.

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