That rate was 3.15% a year ago. And prospective first-time homebuyers in particular are feeling the impact of those higher rates combined with the rising cost of housing.
Byron went over the numbers in this BAM Breaking video and asked agents an important question.
Mortgage Applications down by an average 6.5%
Applications for a mortgage to buy a home fell 7% for the week, dropping to a point 21% lower than the same week last year.
The volume of applications to refinance dropped 6% and is 75% lower than a year ago.
According to CNBC, the overwhelming majority of mortgage holders have rates significantly lower than the current one. Even those wanting to pull money out of their homes are foregoing the refinance option and choosing a second mortgage instead.
Overall mortgage demand is at its lowest level in 22 years.
Housing prices are still on rise
Meanwhile, housing prices are still going up, because, while some new inventory is hitting the market, overall housing supply is historically low. A new report from Core Logic this week shows prices for April at close to 21% higher than a year ago.
The higher mortgage rates make the cost of buying a home that much more expensive, which has driven down demand even as supply remains low.
Byron’s question to agents is “What are you going to do about less home shoppers?”
“You need to be a listing agent in this market. It’s the only way you’ll survive. One of the reasons I’ve done well this year is by far my listings. All my buyers are always coming up with some sort of excuse.”
“I would put more energy trying to obtain listings, and for buyers I would continue to provide value (market stats, neighborhood activity, rates, etc) and continue to build and foster those relationships so if there is a time the market shifts favorably to buyers; I would be top of mind.”
“Don’t do anything – don’t worry about it. If you’re prospecting daily, you have nothing to worry about.”
“Go back to the fundamentals. Role play Prospect. Follow up and repeat 🔁 ”