dampening the red-hot pandemic housing market for a few months now.
Sellers are slashing prices while buyers are sitting on the sidelines, home sales are falling through, contingencies are back, and bidding wars have become more of an exception than the rule.
The most recent evidence of a cooling housing market comes in the form of mortgage loan applications: They were down 23% the week ending Sept. 2 than the same week a year ago, according to the Mortgage Brokers Association.
Mortgage applications to refinance a home loan fell another 1% for the week and were 83% lower than the same week one year ago.
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“Mortgage rates moved higher over the course of last week as markets continued to reassess the prospects for the economy and the path of monetary policy, with expectations for short-term rates to move and stay higher for longer,” said Mike Fratantoni, MBA senior vice president and chief economist.
$374,500 in the second quarter of 2020 to $525,000 in the second quarter of 2022, according to the Federal Reserve Bank of St. Louis.
Mortgage rates climbed from 3.1% for a 30-year-fixed mortgage the week ending June 20, 2020, to 5.8% the week ending June 23, 2022, according to data from Freddie Mac.
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Homebuyers are grappling with home prices that are still soaring amid rising inventory, falling home sales and volatile interest rates.
Fratantoni expects housing demand to keep growing.
“There is no sign of a rebound in purchase applications yet, but the robust job market and an increase in housing inventories should lead to an eventual increase in purchase activity.”
Swapna Venugopal Ramaswamy is a housing and economy correspondent for USA TODAY. You can follow her on Twitter @SwapnaVenugopal and sign up for our Daily Money newsletter here.
Source: usatoday.com