Mortgage applications hit 4-year low as interest rates rise

Potential buyers are backing off because of high rates and low inventory

National /
Nov.November 07, 2018 02:15 PM

(Credit: iStock)

Rising interest rates are pushing mortgage applications to four-year lows.

The Mortgage Banker Association’s market composite index, a measure of loan application volume, fell 4 percent last week to its lowest point since December 2014, according to Bloomberg. The drop correlates with rise in the contract rate on a 30-year fixed loan from 5.11 percent to 5.15 percent last week.

Together with strong pricing for housing around the country and a scarcity of listings, homebuyers are feeling the pressure. In some areas, high mortgage prices and low inventory are dragging down on the market.

The slowdown has prompted some lenders to shrink their mortgage divisions — Wells Fargo laid off 600 workers in August and JPMorgan laid off 400 employees nationwide last month.

Mortgage rates and commercial borrowing costs are expected to keep climbing. Federal Reserve Chairman Jerome Powell has been raising the benchmark borrowing rate to curb inflation and steady an expanding economy. Another hike is expected in December. [Bloomberg] – Dennis Lynch 


Related Articles

arrow_forward_ios
From left: One57 and HNA Group’s Chen Feng, 15 Hudson Yards, 188 E 64th Street and Barry Skolnick (Photos via Getty, StreetEasy, 15 Hudson Yards)
Luxury market hot streak rolls on as Hudson Yards and One57 condos find buyers
Luxury market hot streak rolls on as Hudson Yards and One57 condos find buyers
The $8.9 million Mill Basin property (Douglas Elliman)
Massive Mill Basin townhouse tops Brooklyn contracts
Massive Mill Basin townhouse tops Brooklyn contracts
Meet the 20-somethings funneling their crypto millions into real estate
Meet the 20-somethings funneling their crypto millions into real estate
Meet the 20-somethings funneling their crypto millions into real estate
Cohabs' CEO Youri Dauber and James Grasso (Twitter, LinkedIn)
European co-living company Cohabs plans $50M NYC expansion
European co-living company Cohabs plans $50M NYC expansion
 Jay Bialsky and 2 West Water Street in Sag Harbor (Getty, renderings via Bespoke Real Estate)
The drama behind Jay Bialsky’s $25M listing in Sag Harbor
The drama behind Jay Bialsky’s $25M listing in Sag Harbor
From left: 80 Columbus Circle with Robert Stiller and 737 Park Avenue with Hamad bin Khalifa Al Thani (Photos via Google Maps, Agnovos, State of Qatar, Godsfriendchuck/Wikimedia)
Mandarin Oriental, 737 Park units sell at substantial losses
Mandarin Oriental, 737 Park units sell at substantial losses
Steve Cohen and 151 East 158th Street (Getty, Google Maps)
Steve Cohen’s $30M condo sells above asking — after a 74% cut
Steve Cohen’s $30M condo sells above asking — after a 74% cut
Nicole Oge, Casa Blanca founders Hannah Bomze and Erez Zaurer (Getty, Casa Blanca)
Former Elliman, WeWork marketing chief joins “Bumble for homes” startup
Former Elliman, WeWork marketing chief joins “Bumble for homes” startup
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...