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- Mortgage loan applications fell 6% over the last week, the Mortgage Bankers Association said on Wednesday.
- The latest drop means mortgage demand is at the lowest level in 28 years.
- That's a sign housing demand is still getting slugged by higher rate expectations.
Mortgage applications have fallen to their lowest level in 28 years as rates continue to edge higher, according to data from the Mortgage Bankers Association.
The MBA's Market Composite Index, a gauge of mortgage loan applications, fell 5.7% over the last week, the MBA reported on Wednesday.
The 30-year fixed mortgage rate climbed to 6.71% from 6.62% in the prior week, as markets are raising their expectations for additional rate hikes from the Fed.
"There has now been three straight weeks of declines in applications as mortgage rates have jumped 50 basis points over the past month," MBA deputy chief economist Joel Kan said in a statement. "Data on inflation, employment, and economic activity has signaled that inflation may not be cooling as quickly as anticipated, which continues to put upwards pressure on rates."
The 30-year mortgage rate topped 7% in October amid the Fed's aggressive tightening campaign. And after pulling back close to 6% last month, they have been heading up again as central bankers signal more work to do on inflation.
Higher rates are refueling fears that the housing market could deteriorate in a 2008-style crash, with the sector showing signs of stress.
Home prices could drop by the double-digits in four major US cities by the end of 2024, Goldman Sachs warned in a recent note, as supply is starting to overwhelm demand. And existing home sales have plunged to their lowest levels since 2010.