On Wednesday, the Washington DC-headquartered Mortgage Bankers Association had issued a statement saying that number of Americans filing for mortgage applications declined sharply in the week that ended on May 21, as fewer homeowners were reportedly seeking to refinance their debts amid a soaring housing price and raw materials including lumber futures.
In point of fact, latest report from Mortgage Bankers Association, a national group representing all facets of US real estate industry, came forth a day after US Commerce Department had said that US new home sales plunged 5.9 per cent to a seasonally adjusted 863,000 units on an annualized basis last month, as a rapid rise in house prices in context of a bottlenecked supply appeared to be swaying potential homebuyers away from a booming housing market.
On top of that, the NAR (National Association of Realtors) was quoted saying last week that US existing home sales had declined for a third straight month in April, pointing towards a subdued US homebuilding market which had anchored the economy during last year’s pandemic associated fiscal slumps.
US mortgage applications decline; average long-term mortgage rates rise
Aside from that, according to Mortgage Bankers Association’s Wednesday report, the MBA’s index for seasonally adjusted home purchase fell 4.2 per cent last week, compared to a week earlier, suggesting a rapidly weakening US housing market, while applications for refinancing dropped 7.2 per cent.
Meanwhile, as the US mortgage buyer Freddie Mac was quoted saying earlier on US trading hours that an average of contract interest rates for 30-year fixed home loans rose to 3.18 per cent last week from a 3.15 per cent a week earlier, referring to a steep supply shortage in US housing market, a Natixis CIB economist Joseph Lavorgna said following the announcement, “Housing is booming.
The sector is so strong, there simply is not enough available supply. This is weighing on home sales. In turn, home prices are accelerating. Eventually, more housing will be brought to market, but it will take time”.