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Mortgage demand in U.S. dips to lowest level since COVID-19 impact

Mortgage demand in U.S. dips to lowest level since COVID-19 impact
Two major factors weighing on the market, experts say, are higher home prices and fewer available homes. File Photo by Alexis C. Glenn/UPI | License Photo

July 7 (UPI) -- Mortgage demand in the United States has fallen to its lowest level since the start of 2020, before the COVID-19 pandemic began to take a toll on the economy, an industry report said Wednesday.

Applications fell last week by almost 2% and are down 14% year-to-year, the lowest level since very early last year, the Mortgage Bankers Association said in its report.

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Refinance applications were also down 2% for the week and 8% off what they were a year ago.

Two major factors weighing on the market, experts say, are higher home prices and fewer available homes.

"Swift home-price growth across much of the country, driven by insufficient housing supply, is weighing on the purchase market and is pushing average loan amounts higher," Joel Kan, MBA associate vice president of economic and industry forecasting, said in a statement.

Kan added that many homeowners and potential buyers took advantage of low interest rates in 2020, leading to fewer borrowers this year.

"Refinance applications have trended lower than 2020 levels for the past four months," he noted.

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