Haunted housing: Borrowing costs ease, but borrowers remain spooked
TLT•The average 30-year fixed mortgage rate eased to 7.41% from 7.5%, but total mortgage applications fell 5.3% last week. Purchase applications dropped 7.3% and refinancing applications fell 2.0%.
1. Mortgage demand falls
The average 30-year fixed mortgage rate eased to 7.41% from 7.5%, but demand for home loans continued to decline. Applications to purchase homes fell 7.3%, refinance applications slid 2.0%, and total mortgage demand dropped 5.3% last week. Purchase applications were down 17.9% from a year earlier, while refinance demand fell 58.6%.
2. Housing stocks lag
MBA deputy chief economist Joel Kan said lower rates were not enough to lift applications and that higher rates were pricing buyers out of the market. The S&P 1500 Homebuilding Index and PHLX Housing Sector Index have fallen 9.5% and 10.2% so far this year, respectively, while the S&P 500 has advanced 12.7%.
