Mortgage demand slides across U.S. amid higher home prices, interest rates

Feb. 9 (UPI) -- After a stretch of sustained growth, mortgage demand for homes in the United States has declined as interest rates continue to move upward, an industry report said Wednesday.

The Mortgage Bankers Association said in its weekly report that demand slipped 10% last week -- and were 12% lower compared to the same week a year ago.

The MBA report found that the average interest rate for 30-year fixed-rate mortgages up to about $650,000 inched up from 3.78% to 3.83% last week.

"Rates followed the U.S. 10-year yield and other sovereign bonds as the Federal Reserve and other key global central banks responded to growing inflationary pressures and signaled that they will start to remove accommodative policies," MBA Associate Vice President of Economic and Industry Forecasting Joel Kan said in a statement.

"Both conventional and FHA purchase applications saw proportional declines, resulting in purchase activity overall dropping 10%."

The group said that the total inventory of U.S. homes has fallen by almost 30% from a year ago, and new listings fell 9% -- marking the second consecutive month of declines.

The decline in demand follows months of strong activity nationwide, despite rising home prices and interest rates.

"We're forecasting a whirlwind year ahead for buyers," Danielle Hale, Realtor.com chief economist, said according to CNBC.

"And if January housing trends are any indication, 2022 competition is already heating up. Homes sold at a record-fast January pace, suggesting that buyers are more active than usual for this time of year."

Earlier this week, Fannie Mae said that a survey found that just a quarter of respondents said that now is a good time to buy a home, a record low. Almost 70% said that now is a good time to sell.