Mortgage Demand Falls As Rates Continue to Climb
March 17, 2021
After hitting historic lows in recent months, mortgage rates have been steadily climbing, hitting their highest level since last June this week. Rates have climbed 36 basis points since the end of January, and this is starting to diminish demand.
This has been felt most directly with mortgage refinances, which were down 4% for the week 39% lower than the same week last year. In recent months, refinance volume was more than 100% higher than the year before.
Mortgage originations, which are not as sensitive to the weekly changes in rates, were up 5% from the same week last year, but industry analysts are concerned that climbing rates may further diminish affordability. Record-high demand and record-low inventory have led to some big price increases. Now, higher mortgage rates may leave some buyers priced out. Mortgage demand for newly built homes was down 9% last month, with the Mortage Broker’s Association estimating 748,000 new homes sold. Each of the prior seven months saw more than 800,000 new homes sold.