Mortgage applications falling as home prices rise

The number of U.S. mortgage applications declined last week for the fourth straight week, and the ninth time in 11 weeks, data released this morning by the Mortgage Bankers Association shows.

According to Axios, the consistent downturn in applications shows just how much the housing market has weakened since January when mortgage rates hit all-time lows, and unlike in February when economists pointed their fingers at cold weather, this slump appears to be market driven.

“Mortgage applications for refinances and home purchases both declined, but purchase activity was still convincingly higher than the pandemic-induced drop seen a year ago, as well as up 6 percent from the same week in March 2019,” Joel Kan, MBA’s associate vice president of economic and industry forecasting, says in a release.

Despite the decline in applications, prices continue to rise, as supply has stayed limited thanks to buyers looking to hold on to their quickly appreciating assets and a long-term decline in homebuilding.

Home prices saw the biggest annual gain in nearly 15 years in January, jumping by 11.2%, according to the Case-Shiller index. The index was released Tuesday morning and showed just over 1 million homes for sale at the end of January, the fewest since 1982. See the full story.