Home-buying demand hits record low as buyers seek cheaper mortgage options
- Demand for adjustable-rate mortgages jumps 10%
- Mortgage demand falls for the third week in a row
- Home-buying demand at lowest level since 1995
- Refinance activity at slowest pace this year
- Buyers turning to ARMs to offset high rates
- Overall mortgage demand dampened by rise in rates
Mortgage demand has fallen for the third consecutive week, despite a slight decrease in mortgage rates. Home-buying demand has reached its lowest level since 1995, while refinance activity has slowed down significantly. However, there has been a surge in demand for adjustable-rate mortgages (ARMs), with a nearly 10% increase in the past week. The rise in rates has dampened overall mortgage demand, as reflected in the market composite index, which fell 2.1% from the previous week. Home buyers are turning to ARMs as a way to offset the high rates and make the cost of taking on a mortgage more affordable. However, the overall demand for home buying remains low, as buyers find the current rate environment and home prices to be expensive. The Mortgage Bankers Association (MBA) reported that the average contract rate for a 30-year mortgage was 7.86% for homes sold for $726,200 or less, down slightly from the previous week. The rate for jumbo loans, or mortgages for homes sold for over $726,200, increased to 7.8%. The average rate for a 30-year mortgage backed by the Federal Housing Administration rose to 7.57%. The rate for adjustable-rate mortgages fell to 6.77% and now accounts for 10.7% of all applications. Overall, the demand for adjustable-rate mortgages has surged as buyers seek cheaper mortgage options in the face of high rates.
Factuality Level: 7
Factuality Justification: The article provides information about the current state of the mortgage market, including the decrease in mortgage demand, the increase in adjustable-rate mortgages, and the average rates for different types of mortgages. The information is sourced from the Mortgage Bankers Association. However, the article lacks in-depth analysis and context, and it does not provide a comprehensive view of the factors influencing the mortgage market.
Noise Level: 3
Noise Justification: The article provides relevant information about the current state of the mortgage market, including the decrease in mortgage demand and the rise in adjustable-rate mortgages. However, it lacks in-depth analysis, evidence, and actionable insights. The article also contains some repetitive information and does not explore the consequences of these trends on individuals or the economy.
Financial Relevance: Yes
Financial Markets Impacted: Mortgage market, home-buying market
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Rating Justification: The article discusses the impact of mortgage rates on mortgage demand and home-buying activity. While there is no mention of an extreme event, the information provided is relevant to the financial markets and companies in the mortgage industry.
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