Mortgage rates once again crept over 7% as mortgage loan application volume fell, according to the latest report from the Mortgage Bankers Association.
The MBA said that last week mortgage rates rose from 6.93% to 7.03%. Additionally, the Market Composite Index, a measure of mortgage loan application volume, fell 2.6% on a seasonally adjusted basis from the previous week, another sign that the housing market is struggling.
“Mortgage rates moved higher last week, crossing the 7% mark, even as the latest inflation data has kept market expectations alive for a rate cut from the Fed later this year,” said Mike Fratantoni, MBA’s senior vice president and chief economist. “Purchase applications decreased the final full week of June, even as both new and existing inventories have increased over the past few months.”
The latest data is yet another reminder of the struggles that the housing market has been facing.
The higher mortgage rates have eaten into housing affordability and have also depressed home purchases. The higher mortgage rates are a direct result of the Federal Reserve raising interest rates in response to too-high inflation.
New home sales fell 11.3% from April to a seasonally adjusted annual rate of 619,000, according to a recent report from the Census Bureau. The number of new home sales is 16.5% lower than it was in May of last year.
