Mortgage Apps Hit 22-Year Low

Inflation, inventory, and higher prices are creating a bottleneck for new home buyers to step into this fluid real estate market. According to the Mortgage Bankers Association, mortgage application volume fell for the week of June 3rd by 6.5%, representing the lowest level of applications in 22 years. According to the Association, the 30-year fixed rate increased to 5.4%, which is approximately double what it was two years ago. This spike in rates is being attributed to squelching a good deal of the refinance portion of the mortgage market.

According to the report, the refinance share of mortgage applications increased by 32.2% of all applications, which is higher than the 31.5% reported from the prior week. Affordability appears to be the big hurdle many buyers are grappling with.

The good news is that for the month of May, inventory increased for homes coming onto the market. This is the first time that we’ve seen such a bump since June 2019. Notwithstanding, total inventory for active listings is still down 48.5% from where it was back in June 2019. The national median home price continues to climb, and according to the National Association of Realtors, hitting $447,000 in the month of May, representing a 35.4% climb year-over-year.