Mortgage applications plummet 14% as higher interest rates and Hurricane Ian crush demand.
The highest mortgage rates in more than 20 years coincided with one of the deadliest hurricanes on record in the United States, both contributing to a steep drop in mortgage demand.
Total mortgage application volume fell 14.2% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index, to the lowest level since 1997.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 6.75% from 6.52%, with points decreasing to 0.95 from 1.15 (including the origination fee) for loans with a 20% down payment.
“The current rate has more than doubled over the past year and has increased 130 basis points in the past seven weeks alone,” noted Joel Kan, an MBA economist.