The numbers: Mortgage rates remain above 7%, slowing demand for refinancing and dragging overall mortgage demand down for the seventh week in a row.
Mortgage applications fell 0.1% this week, as rates remained above 7%.
While some buyers were still purchasing homes, demand for refinancing continues to fall, dragging the overall number down. Refinancing is now at the lowest level since 2000.
High rates weighed down the market composite index, a measure of mortgage application volume, the Mortgage Bankers Association (MBA) said on Wednesday.
The market index dropped 0.1% to 199.9 in the week ending November 4. A year ago, the index stood at 658.1.
Key details: The refinance index fell 3.5%, and was down 87% compared to a year ago.
The purchase index — which measures mortgage applications for the purchase of a home — rose by 1.3% from the previous week.
While purchase applications reversed a six-week losing streak, they’re still at a 7-year low.
Refinancing has fallen to the lowest level since August 2000, the MBA said.
The adjustable-rate mortgage share of activity rose to form 12% applications.
The average contract rate for the 30-year mortgage for homes sold for $647,200 or less was 7.14% for the week ending November 4.
That’s up from 7.06% the week before, the MBA said. This is the third week in a row that the 30-year is above 7%, they added.
For homes that sold for more than $647,200, the average rate for the 30-year was 6.5%.
The 15-year rose to 6.4%. The rate for adjustable-rate mortgages rose to 5.87%.
The big picture: Mortgage rates are high, but the data suggests that some home shoppers are accepting 7% as the new normal.
To be clear, high rates continue to hammer the housing market. Rates are double where they were last year, adding hundreds of dollars in monthly interest payments for homebuyers.
It’s also shrinking the budget they have for homes. And with home prices still elevated, prospective buyers continue to have a tough time finding good listings. Fannie Mae on Monday said that homebuyer sentiment is at the lowest level since 2011.
But the lack of intense bidding wars this time around, or the concessions made by some sellers, may be enticing some to buy.
Meanwhile, refinances continue a long descent downwards, as homeowners don’t see value with rates above 7%.
Market reaction: The yield on the 10-year Treasury note
rose above 4.1% in early morning trading.