ICYMI: Mortgage Applications Crash to Three Decade Low
Under President Biden, home ownership is becoming less and less accessible for middle class Americans as interest rates continue to soar. A recent report from the Mortgage Bankers Association shows mortgage applications fell 6.9 percent last week to the lowest level since 1995.
According to Reuters analysis of the report, “The volume of U.S. mortgage applications plummeted to the lowest in nearly three decades last week as the interest rate on the most popular type of home loan rose for a sixth straight week to the highest since 2000, the latest data to point to no near-term relief for the slumping housing market.”
Word on the Street via Reuters:
- “The Mortgage Bankers Association's weekly index of mortgage application activity fell 6.9% in the week ended Oct. 13 to 166.9, the lowest since May 1995. Applications for loans to buy a home fell 5.6% to the lowest since February 1995 and applications to refinance an existing mortgage tumbled 9.9% to the lowest since January.”
- “The average contract interest rate on a 30-year fixed-rate mortgage rose 3 basis points to 7.70%, the highest since November 2000, MBA said. Residential borrowing costs have risen roughly by half a percentage point since the beginning of September.”
- “In addition to high borrowing costs, sales are being restrained by very low inventory of homes on the market. Economists suspect that homeowners, many of whom have mortgages at much lower rates than are currently available, are reluctant to give up their homes only to have to buy a new one with borrowing costs remaining as high as they are now.
The Big Picture:
Higher interest rates continue to exacerbate America’s housing crisis.
Increased borrowing by the federal government to pay for the debt crowds out private investment as hardworking American families are seeing more and more of their money going toward government interest payments.
Interest rates are also chipping away at the already slim supply of homes on the market as sellers who locked in lower pre-pandemic mortgage rates hesitate to sell with rates currently at a two-decade high.
A recent report from Realtor.com contends that the total number of homes for sale fell by 4 percent in September 2023 compared with the same time last year, and available home supply remains down a staggering 45.1 percent from average pre-pandemic levels.
Our out-of-control federal debt is causing interest rates to rise and bankrupting the dream of homeownership in America. As Paul Winfree – President and CEO of the Economic Policy Innovation Center – put it, “in essence, lowering interest costs is not only central to avoiding a future crisis but it is also essential to supporting the American Dream.”
The Bottom Line:
The American dream of homeownership seems to be slipping further and further away for everyday Americans. We must protect the America we know and love and Reverse the Curse of Bidenomics that is crushing families—House Republicans have a plan to get the job done.
