The Mortgage Bankers Association reported a decrease in demand for home loans, the lowest since March. This decline was attributed to the first increase in mortgage rates in four weeks. Applications for mortgage loans dropped by 5.7% by the end of the week of May 24, with the 30-year fixed-rate mortgage increasing to 7.05%.
According to MBA Vice President Joel Kan, borrowers are sensitive to even small increases in rates, impacting the refinance market and keeping purchase applications below last year’s levels. Home purchases saw a 1% decline, while mortgage loan refinancing dropped by 14% compared to the previous week.
Kan also highlighted the fact that low inventory levels continue to affect the housing market. Many buyers are struggling to find listings in their price range that meet their needs, further contributing to the overall decline in demand for home loans.