Rising mortgage rates are finally taking a toll on homebuyers, who are already stretched by high home prices. As a result, demand for mortgages fell.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances increased to 3.83% from 3.78%
Applications to refinance a home loan fell 7% for the week and were 52% lower than the same week one year ago. Mortgage applications to purchase a home dropped 10% last week compared with the previous week, seasonally adjusted, and were 12% lower year over year, according to the Mortgage Bankers Association. The average loan size hit another record high at $446,000, indicating that most of the buying activity is on the higher end of the market, where there is comparatively more supply.
"We're forecasting a whirlwind year ahead for buyers, and, if January housing trends are any indication, 2022 competition is already heating up. Homes sold at a record-fast January pace, suggesting that buyers are more active than usual for this time of year," said Danielle Hale, Realtor.com's chief economist.
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