Home-purchase applications tumbled last week to the lowest level in nearly three decades as high interest rates and limited availability weighed on demand.
A key measure of home-purchase applications tumbled last week to a nearly three-decade low as consumer demand cooled sharply amid a recent surge in mortgage rates. The Mortgage Bankers Association's index of mortgage applications fell 6% last week to the lowest level since 1996, according to new data published Wednesday. The data also showed that the average rate on the popular 30-year loan climbed for the fourth straight week to 7.53%, the highest level since 2000.
The interest rate-sensitive housing market has cooled rapidly in the wake of the Federal Reserve's aggressive tightening campaign. Policymakers already lifted the benchmark federal funds rate 11 consecutive times as they try to crush stubborn inflation and slow the economy. Officials signaled during their policy-setting meeting in September that another rate hike is on the table this year – and that rates are likely to remain elevated for some time.
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