Mortgage demand from homebuyers falls 29% since last year, as interest rates surge past 6%

• Mortgage demand appears to have nowhere to go but down, as interest rates go up. Application volume dropped 1.2% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. The week’s results include an adjustment for the observance of Labour Day. Since last year, homebuyers’ demand for mortgages has fallen by nearly a third.
• Mortgage rates, which had been easing slightly through July and August, pushed higher yet again after Federal Reserve Chairman Jerome Powell made it clear to investors that the central bank would stay tough on inflation, even if it caused consumers some pain.
• The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 6.01% from 5.94% for loans with a 20% down payment.
• Refinance demand fell another 4% for the week and was 83% lower than the same week one year ago. With rates above 6%, only about 452,000 borrowers could benefit from a refinancing, according to Black Knight, a mortgage technology and data provider. That is the lowest number on record.

(Source: CNBC)