đ U.S. mortgage applications have fallen 34%
below pre-2020 levels even weaker than during the 2008 housing crash.
Despite rate cuts last year (and more expected soon), demand hasn't returned to normal. The main problem is prices: until home prices drop meaningfully, buyer demand will likely remain suppressed.
The latest Mortgage Application Index reading came in at 158.7, which is up 16% from a year ago but still down sharply compared to recent years: -20% from 2022, -39% from 2021,
-49% from 2020, -35% from 2019, and -31% from 2018.
This highlights a deeper issue: affordability. Higher mortgage rates, elevated home prices, and stagnant real wages are combining to keep many buyers on the sidelines. Even if rates move lower, it may not be enough without price corrections.
Do you think the housing market can recover without a significant drop in home prices?
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