Mortgage interest rates just hit a level not seen since the year 2000. As a result, mortgage demand is now sitting near a 27-year low.
Total mortgage application volume fell 1.3% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Volume was 25.5% lower than the same week one year ago.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) increased to 7.41%, from 7.31%, with points decreasing to 0.71 from 0.72 (including the origination fee) for loans with a 20% down payment. The rate was 6.52% one year ago.
The 30-year fixed jumbo mortgage rate increased to 7.34%, the highest rate in the history of the MBA’s jumbo rate series dating back to 2011.
And available inventory is low because people have 2.5% mortgages and would have to move to a much lesser valued house to have similar payments at 7%. But since the number of available houses is low, there are no cheaper houses.
Anyone feel like squatting in an AirBnB? I feel like getting rid of those could free up more stock.
Yep. Bought a home right before covid when interest rates were super low, I would love to sell my home and move but it would be the dumbest financial decision I’ve ever made.
Not to mention losing a couple bedrooms just to afford a new place.
Rent out your home and rent something else where you want to go. That way you keep building equity while renting and you provide a home for someone else. Sell when you are ready to buy in the new location or market conditions improve in your favor.
If you don’t want the landlord duties, outsource your home to a real estate management company.
Edit: https://fortune.com/2023/03/13/housing-market-homeowners-who-held-onto-low-mortgage-rates-are-becoming-accidental-landlords-renters-real-estate/
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This is a much larger factor in the drop off of mortgage requests, the “lock in” phenomenon is a real thing. It seems like there’s a lot of ignoring of this very simple fact. If you have a rate of 2.4% then why would you switch to a rate of approaching eight percent?